SHANGHAI, Oct 9 (SMM) – Prices of spot rebar across Chinese markets are expected to move rangebound in the short term, as pent-up demand will counter supply recovery after authorities lifted alerts for heavy air pollution in early October.

Heavy smog hit part of north, central and east China in late September, which prompted local authorities issued orange smog alerts, the second-highest in Beijing’s four-tier pollution alarm system, and imposed restrictions on heavy industries to cushion air pollution.

Hebei, China’s biggest steelmaking province in north China, issued an orange smog alert on September 23 and imposed stricter curbs on sintering and pelletising machines, blast furnaces and electric arc furnaces (EAF) at steel mills. Restrictions on steelmakers in other regions followed several days after Hebei’s move.

Most steel mills have recovered their production after the smog alerts were lifted in early October in a bid to chase decent profits, SMM learned. EAF steelmakers, however, failed to recover, due to a shortage of steel scrap.

With supply recovering after the removal of smog alerts, demand will also likely pick up, as transport curbs and the week-long National Day holiday have subdued consumption.

Hebei’s Jinxi Steel said that the production curbs knocked out about 100,000 mt of its supply and it has recovered 75% since the resumption on October 4.

Xuzhou Jinhong Steel, in east China’s Jiangsu province, saw its rebar inventories increasing over the public holiday, as environmental restrictions little affected its production thanks to stockpiles of sinters.

Jiangsu Binxin and Shandong Steel reported limited inventory pressure, as smooth shipments kept their rebar stocks at normal levels after they recovered production from smog-alert curbs.