Last week, China announced plans to close all illegal substandard steel production by the end of this June. According to Macquarie research, “industry estimates suggest total capacity from this type of furnace is as high as 110-120 million tons per year, although their capacity utilization is generally low, only 30-50% last year.” Iron ore futures have rallied to new short-term highs with February SGX (Singapore Exchange) futures closing at 82.17$/t on Monday.