SHANGHAI, Jul. 7 (SMM) - Some galvanizers in North China were restricted by strip steel supply shortages, SMM understands. They began to suspend production lines and cut output from July 1.
On top of this, about 2,000 tonnes of zinc consumption will be affected, SMM reckons.
Output at some steel plants was hurt by capacity elimination and environmental protection reasons, SMM learnt. Meanwhile, strip steel prices lacked impetus to rise. Some strip steel plants using purchased billet as raw materials entered loss territory after billet prices rose, and were unwilling to produce. The price spread between strip steel and billet narrowed from 250 yuan per tonne to below 200 yuan per tonne.
Some strip steel plants having blast furnaces increased sales of billet capitalizing higher prices. Consequently, their strip steel output declined, SMM added.
Two large galvanized pipe plants and many small ones will partially close their production lines for about 7 days from early July, and will restart on July 8, SMM survey finds.
North China-based galvanizers weathered environmental protection checks in the first and second quarter. SMM will continue tracking this issue.
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