Handan city likely to extend output cuts at steel plants

SHANGHAI, Mar 28 (SMM) – Steel plants in Handan city, Hebei province are likely to face more output cuts after March 31, when an earlier restriction is set to be lifted, SMM learned. 

The new cut, estimated to be 40%, remains under negotiation in the local government. A steel plant in the Wu'an area in Handan said that its finances remain suspended and that no steelmaker in the area has resumed operations.

While the impact of the expected cut is still unclear, SMM estimates that monthly output of 960,000 mt of pig iron will be affected. This will account for some 1.2% of China's monthly output of pig iron of 81.66 million mt. 

In the spot market, steel prices in most cities rebounded on Tuesday March 27 as downstream demand recovered and concerns of a US-China trade war eased. But it remains unclear if this will be a turning point.

In Hangzhou, rebar prices climbed to a high of 3,620-3,630 yuan/mt with on March 27. The Shanghai market also saw more transactions as prices rose 70-80 yuan/mt to stand at 3,520-3,570 yuan/mt. In the Wuhan and Guangzhou markets, offers rallied several times as buyers were keen to stock.

Trading was flat in cities such as Guiyang, Chongqing, and Kunming.

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