SHANGHAI, Jun. 3 (SMM) – Although reports about maintenances of steel mills have been swirling, Steelease data showed that actual production cuts caused by mill maintenance are lower than announced:
Liuzhou I/S conduct 30-day maintenance to its 1,500 m3 blast furnace and one hot-rolling production line starting on May 30, cutting 8,000 mt in hot-rolled steel output each day. (Confirmed)
Jinan I/S will conduct maintenance to its 1,750 m3 blast furnace with specific schedule unreleased, and require its 3,200 m3 blast furnace for three days starting on June 25 (Confirmed).
Chengde I/S will plans to undertake a 21-day maintenance to its 1,500 m3 blast furnace starting on June 10, cutting hot-rolled coil output 110,000 mt (Under discussion).
Many steel mills announced to enter maintenance cycles when prices fall sharply, but some were still hesitant for fear of losing their market share. Thus, some announced to cut production only closed their furnaces temporarily and planned to restart once profits are available. As such, Steelease believes that losses at most mills were not as much as RMB 400/mt and were about RMB 100-250/mt, which may not result in mill’s firm resolve to cut production.
In addition, it was reported that Shagang may lower its ex-works prices for hot-rolled coils in June by RMB 300/mt, and offer a rebate of RMB 200/mt to traders.