Bloomberg reported that POSCO, JFE Holdings Inc and other Asian steelmakers advanced after steel prices in China the biggest consumer of the metal, jumped amid production cuts.

Benchmark hot rolled coil prices in China rose 3.5% recently to the highest in almost four months as steelmakers in Hebei Province shut mills after the local government limited electricity supply to reach power efficiency targets.

Credit Suisse Group AG said last week as much as 25 million tonnes of annual steel capacity may be suspended as local governments seek to meet power targets. Hebei province, the biggest steel producer in the country will demand that Tangshan Iron & Steel Group, Shougang Corp and other steelmakers curb output to meet energy targets.

Mr Nathan M Zibilich JPMorgan Chase & Co analyst said “We believe there are more targeted measures ahead to conserve energy consumption and that both steel prices and equities have further upside from here. China has cut energy consumption per unit GDP by 15.6% between 2006 to 2010 below its target of 20% reductions.”

Mr Park Kee Hyun an analyst at Tong Yang Securities Inc said “Investors seem to be betting that Korean mills will benefit from output curbs in China’s Hebei province, which drove prices in China higher.”

(Sourced from Bloomberg)