Stricter requirements to have limited impact on Tangshan steel mills-Shanghai Metals Market

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Stricter requirements to have limited impact on Tangshan steel mills

SMM Insight 03:13:25PM Dec 05, 2018 Source:SMM

SHANGHAI, Dec 5 (SMM) – Even as the market fretted over more rigorous winter cuts in Tangshan after the municipal government released an updated notice on December 3, local steel mills are likely to see limited impact. This expectation came after mills implemented cuts of 20-30% on blast furnaces. Those mills also raised the proportion of steel scrap used as raw materials, to offset part of the impact of winter cuts, SMM research found. 

SMM learned that the government release was likely aimed at buoying market sentiment on steel prices. 

The release on December 3 ordered that steel mills to strictly implement 2018/2019 winter cuts on blast furnace capacity. Mills cannot turn to alternative methods such as short-term maintenance, or production cuts by controlling wind and oxygen supply. 

At noon on Wednesday December 5, the SHFE rebar 1901 contract climbed to a high of 3,793 yuan/mt, up over 1% from that time on Tuesday. 

Price

more
62% Fe Fines (Qingdao Port): IOPI62
Apr.19
669.0
0.0
(0.00%)
62% Fe Fines (Qingdao Port, CFR Equiv.)
Apr.19
92.0
-0.2
(-0.20%)
58% Fe Fines (Qingdao Port): IOPI58
Apr.19
601.0
0.0
(0.00%)
58% Fe Fines (Qingdao Port, CFR Equiv.)
Apr.19
82.2
-0.2
(-0.19%)
65% Fe Fines (Qingdao Port): IOPI65
Apr.19
777.0
3.0
(0.39%)

Stricter requirements to have limited impact on Tangshan steel mills

SMM Insight 03:13:25PM Dec 05, 2018 Source:SMM

SHANGHAI, Dec 5 (SMM) – Even as the market fretted over more rigorous winter cuts in Tangshan after the municipal government released an updated notice on December 3, local steel mills are likely to see limited impact. This expectation came after mills implemented cuts of 20-30% on blast furnaces. Those mills also raised the proportion of steel scrap used as raw materials, to offset part of the impact of winter cuts, SMM research found. 

SMM learned that the government release was likely aimed at buoying market sentiment on steel prices. 

The release on December 3 ordered that steel mills to strictly implement 2018/2019 winter cuts on blast furnace capacity. Mills cannot turn to alternative methods such as short-term maintenance, or production cuts by controlling wind and oxygen supply. 

At noon on Wednesday December 5, the SHFE rebar 1901 contract climbed to a high of 3,793 yuan/mt, up over 1% from that time on Tuesday.