SHANGHAI, May 2 (SMM) – As the third round of environmental checks in Jiangsu province progressed, steel mills that passed inspections were approved to resume regular production. Some mills remain suspended, as of Wednesday May 2, SMM learned.
The month-long inspections are expected to end on May 23. Major cities in Jiangsu such as Xuzhou, Changzhou, and Lianyungang are affected across the steel, cement, and building materials sectors.
A large-scale steel plant in Changzhou returned to operations on Tuesday May 1. However, its two blast furnaces of 1500 m3 and 1580 m3 remain under maintenance. Another blast furnace of 510 m3 is suspended for capacity replacement. This is estimated to affect output of molten iron by 10,000 mt per day. The resumption date remains unclear, but supplies from the plant will be little affected short term due to adequate stocks of finished steel products.
All steel plants in Lianyungang resumed operation on May 1 after going through the environmental check, SMM learned. In major cities along the Yangtze River, there was little impact from environmental probes as only a few steel mills were required to conduct maintenance during the inspection period.
In Xuzhou, steelmakers remain under full suspension and are expected to resume operation in mid-May. Most have already completed rectifications and will resume production after checks by the environmental inspection team. Dates of the checks, originally scheduled for April 28, remain unknown.
In the spot market, rebar prices rose further after the Labour Day holiday as environmental restrictions limited supplies. As buyers hold back, SMM expects prices to edge down from highs of an average of 4,124 yuan/mt across China in the short term.
On May 2, Shanghai, Hangzhou, and Guangzhou saw an uptick in rebar prices by 80 yuan/mt to 4,080-4,280 yuan/mt, from Saturday April 28. Prices in the Fuzhou market surged by 150 yuan/mt to 4,200 yuan/mt from before the holiday. Transactions were mostly flat as buyers were deterred by higher prices while sellers, worried about the futures market, were keen to destock.
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