SHANGHAI, Sep 10 (SMM) – Output of hot-rolled coil (HRC) and plates across major Chinese steel mills is expected to decrease in September due to production curbs from environmental initiatives and maintenance across rolling lines. Some mills preferred to produce rebar, wire rods to chase wider profit margins, and this will further shrink output of HRC and plates.

As of Friday September 7, SMM research found that 25 major Chinese steel mills plan to produce a total of 8.81 million mt of HRC and plates in September, down 4.42% from the realised output in August. Volumes for exports account for 741,000 mt, down 2.88% and volumes for the domestic market account for 8.06 million mt, down 4.56%.

This larger decline in supply, compared to August’s 1.9%, is likely to provide strong support to prices of HRC and plates, SMM expects.

Surveyed mills in the north are estimated to produce 4.34 million mt of HRC and plates this month, down 4.2% from actual output of 4.53 million mt last month. Volumes for exports will fall by 0.7% to 291,000 mt. Those mills exported 293,000 mt of HRC and plates last month.

Surveyed mills in the east are expected to produce 2.83 million mt of HRC and plates this month. This is down 5.9% from August’s realised output of 3.01 million mt. Planned volumes for exports would account for 410,000 mt, down 6.8% from last month.

Surveyed mills in the central and south are estimated to produce 1.31 million mt of HRC and plates in September, down 4.7% from actual output of 1.37 million mt in August, while scheduled volumes for exports increased by 10,000 mt to 40,000 mt.

Surveyed steelmakers in west China, including Jiuquan Steel and Pangang, are expected to produce 328,000 mt of HRC and plates this month, up 7.9% from actual output of 304,000 mt a month ago. Production recovery from maintenance at the two mills would account for the increase in output.