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Are China's 'zombie' steelmakers reviving?

International steel market frets over signs that illegal steel is once again flowing

Illegal steel made from scrap is again appearing in China, raising fears of a renewed glut on international markets.   © Reuters

SHANGHAI -- China's output of low-quality steel made from melted-down scrap metal is on the rise again, raising concern that international steel prices will suffer.

The Chinese government has worked to stamp out illegal production of steel, which contributed to the country's overcapacity and disrupted the international steel market a few years ago. But steelmakers in some regions are resuming black-market production as the crackdown eased in response to an uptick in prices.

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