China steel bar producers call for authorities to restrict output amid price slump

China Steel

02/04/2024 12:31

BEIJING, April 2 (Reuters) - Fifteen of China's major
steel bar producers have unanimously called on authorities for
measures to restrict steel bar output to support prices, the
China Iron and Steel Industry Association said on Tuesday. 
    Steel bar prices have seen "irrationally" sharp declines
amid ongoing weakness in China's real estate and infrastructure
sectors, leading steel bar producers to face narrowing margins
and losses, the association said. 
    Steel bar demand from infrastructure construction has
contracted due to spending cutbacks by indebted local
governments. Twelve cities and provinces with high debt burdens
have delayed or halted projects, the association noted. 
    Prices of steel rebar on the Shanghai Futures Exchange
 SRBcv1  have fallen by 14.2% since the start of the year. 
    Authorities should also strengthen supervision of
speculation in the futures market, it said. 
    Facing weakening demand, some suppliers have already taken
measures to support prices. Of the total furnace capacity in
Shanxi province, 38.4% has been shutdown for maintenance, the
association said. 
    China's steel reinforcing bar output dipped 0.3%
year-on-year to 32.1 million metric tons in the first two months
of this year, official data previously showed, accounting for
19% of the country's total crude steel output during the period.

 (Reporting by Andrew Hayley and Amy Lv; Editing by Devika
Syamnath)
 ((Andrew.Hayley@thomsonreuters.com;))