The Production of Leading Steel Mills May Drop by Over 50% amid Intensifying Power Rationing in Jiangsu

SHANGHAI, Oct 19 (SMM) - According to SMM research, the power rationing intensified again in Jiangsu on the evening of October 18, forcing local steel mills to cut their production massively. At present, steel mill 1 (blast furnace) has stopped production on the night of October 18. The rolling line of steel mill 2 (blast furnace) will reduce the power use by 60%. Steel mill 3 (blast furnace)’s hot rolling line will reduce the production by 50%.

It is understood that the power supply in Jiangsu continues to be tight after the National Day, and the local steel production is extremely unstable. Due to frequent changes in power restriction policy, the blast furnace steel mills generally take to stop in the rolling line but not the blast furnace as a response, so the short-term billet output will not be greatly impacted. While the output of finished steel will be reduced.

Going forward, the output of finished steel in Jiangsu is highly likely to hover a low level, and the recent sales of steel mills have been sluggish. The current round of power rationing will support the prices in the short term, but the long-term growth engine still lies in the demand side.