Tangshan, the top steel-making city of China, further tightened control on steel production at Fengrun district in the city to tackle air pollution, according to a document issued by local government lately.
Some independent rolling steel mills were asked to suspend production from July 5, 18:00 until further notice. Meanwhile, Tianzhu Group, a large firm in the district, was requested to halt production of one more 208m2 sintering unit, and reduce production of pellets and lime kilns by no less than 50%.
Local steel mills were reportedly preparing for the possible restriction, which was expected to be implemented on July 7.
If production of targeted independent rolling mills at Fengrun is completely shut down as required, the total output of profile steel will reduce by 61,200 tonnes per day. It was said the restriction is likely to be lifted on July 9, when the heavy pollution index is forecast to improve.
Restriction period of rolling mills that use purchased billet in production may be longer, as they are required to stop production for another half month starting July 16.
This, together with steel capacity reduction policy in Xuzhou of eastern China's Jiangsu and still optimistic expectation to the market under the country's general policy of boosting infrastructural construction, slightly pulled up rebar prices.
On July 6, prices of the H-shaped steel beam climbed about 20 yuan/t at some areas, including Beijing-Tianjin-Shijiazhuang districts, Taiyuan, Guangzhou and Shenyang.
On the same day, price of 200*200mm H-beam in 15 major cities averaged 3,780 yuan/t, up 4 yuan/t from the previous trading day and 300*300mm grade was up 8 yuan/t to 3,922 yuan/t, showed the monitoring data from Lange Steel.
Despite the upward revision, rebar prices may still be under downward pressure in the near term amid rain-prone season in southern China.
As construction demand is restrained and logistics time is expanded due to continuous rainstorm and floods, steel product inventories at warehouses and some steel mills saw faster increases over the first week of the month, raising concerns of possible downturn after the short-lived rally.
(Writing by Emma Yang Editing by Jessie Jia)
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