Mill Maintenance Increases in April, Hot-Rolled Coil Prices Gain Support from Demand Recovery

SHANGHAI, Apr. 9 (SMM) – Hot-rolled coil prices offered for April were cut some RMB 100-300/mt by steel mills, with Ningbo I/S lowering as much as RMB 400/mt or 10%. However, imported iron ore prices staged slightly decline and remained at USD 136/mt. As ex-works prices for hot-rolled coils are between RMB 3,980-4,050/mt after price cuts, some mills reported meager profits or even losses based on the current iron ore prices. As such, several mills planned to conduct maintenance and limit production in April. However, as prices have not yet fallen below cost lines, production cuts were not evident. Mills conducting maintenance operations are as follows:

Ansteel will start maintenance to its 1580mm production units in April and 2150mm units in May, with April’s output expected to fall 100,000 mt.
Tiantie Group will conduct 10-day maintenance to its hot-rolled plate and coil units, with output expected to decrease 50,000 mt in April.
Rizhao I/S will cut 60,000 mt of its production in April.
Tangshan I/S will lower output by 45,000 mt in April, due to adjustment of products.

However, large-scale maintenance was not reported and mill prices did not fall sharply since downstream demand is still improving in April and May, lending certain support to prices.