China’s steel production growth is expected to slow sharply in 2018 as state-mandated factory closures and policies to protect the environment begin to bite. The world’s largest producer of the metal will experience just a small rise in output of 0.6 percent this year, a poll of 15 analysts found in a Financial Times survey. Steel is often viewed as a barometer of economic activity because it is used in carmaking, construction and manufacturing, which means a significant price move could have repercussions for the broader economy.

For the steelmakers, the Chinese slowdown could have positive effects. A modest increase in production from China, which accounts for about half the 1.7bn tonnes churned out worldwide, could restore balance to a global market that was ravaged by a collapse in prices two years ago due to oversupply. The anticipated slowdown comes despite a robust outlook for the Chinese economy and contrasts with a 5.7 percent jump in its crude steel output during the first 11 months of 2017, according to World Steel Association figures.