Chinese authorities advise steel companies to reduce steel production

Chinese authorities have warned steel companies in the country about decreasing prices in the market.

Mysteel and Shanghai Metals Market (SMM) announced that more than 30 mills in North and Northwest China will suspend capacity for maintenance on April 25, analysts said.

On April 24, 15 blast furnaces across the country also entered maintenance. As a result, pig iron output will decrease by 615.9 thousand tons in April 2023.

Rebar prices on the Shanghai Futures Exchange as of April 21, 2023 were down 11% from the end of March and 2.3% since April 11. The price of hot-rolled steel decreased by 3.8% in the same week. Chinese steel and rolled metal producers warn that this is due to overproduction in the sector.

They warned that China's steel production will amount to 1.25 billion tons in 2023.

At the same time, consumption amounted to 910 million tons in 2022. In 2023, it could increase to 960 million tons, which is still significantly less than production volumes.