Leading Chinese steelmaker Baosteel will not raise prices for flat products for April domestic sales. The decision applies to all types of these products, including hot-rolled and cold-rolled coils, Kallanish reports.
In February, Baosteel raised prices for March sales for most types of flat products by 100 yuan per tonne ($14 per tonne) ahead of the peak season. However, supply and demand are currently on the decline.
At the same time, hot rolled coil (HRC) production among 37 Chinese flat steel producers has been declining for the third week in a row, according to Mysteel’s production survey. From February 27 to March 5, it amounted to 3.12 million tons, down 3.6% from the previous week.
Some steel mills in the north and east of the country shut down hot rolling mills for maintenance or slowed production during the week.
Market participants also attributed the slower-than-expected decline in HRC production to a recovery in domestic demand combined with growing trade disputes over Chinese steel. In addition, prices for metallurgical raw materials continued to decline between February 27 and March 5, which reduced the cost of steel products.
As of March 6, HRC stocks at 37 surveyed plants decreased by 3.7% y-o-y – to 880.3 thousand tons, while stocks in commercial warehouses of traders in 33 Chinese cities monitored by Mysteel fell by 0.9% to 3.41 million tons.
As GMK Center reported earlier, China has announced the restructuring of the steel industry by reducing production in the sector. This was announced by the National Development and Reform Commission. At the same time, the authorities did not provide specifics on the possible scope of cuts in the sector. The market speculated that steel production could be cut by 50 million tons per year.
