SHANGHAI, Apr. 3 (SMM) - Shasteel announced it will suspend second grade rebar production according to the government's orders in May. The second grade rebar of Shasteel and in Chongqing which had been shut down was released to markets. But bans for 235 high speed wire rod have yet to be canceled.
Most rebar producers have second grade rebar at hand. Most steel plants surveyed by Steelease have yet to receive notices about suspending second grade rebar production, and adjust proportion of second and third grade rebar production. According to Steelesae sources, many infrastructure projects are required to use second grade rebar, so the suspension of second grade rebar production needs negotiations of many departments. A few high speed wire rod producers reported they had received a notice forbidding them to produce 235 high speed wire rod, but market demand was still strong. They will likely shift to produce 300 high speed wire rod soon.
Second grade rebar proportion at Shasteel was 40%, at Yonggang was 20%, and at Shaogang was 60-70%, and Guangzhou Iron & Steel mainly produces second grade rebar, while produces third grade rebar according to sales, with the proportion of 50% at Liuzhou Iron & Steel, 10-20% at Wangang, 60-70% at Fangda Special Steel, 30-40% at Masteel and 40% at Beitai Iron & Steel. Rizhao Iron & Steel rarely produces second grade rebar, while Xinjiang Bayi Iron & Steel producers second grade rebar according to sales, with the proportion of 50% last year. Beitai Iron & Steel, Hebei Iron & Steel, Shasteel, Xinyu, Pinggang and Fangda Special Steel mainly produce 300 high speed wire rod, while most steel plants produce 235 high speed wire rod. Since HPB235 high speed wire rod production has been announced to suspend, many steel plants will receive notices informing them to adjust high speed wire rod production. Costs of 300 high speed wire rod production are RMB 30-50/mt higher than 235 high speed wire rod.