Several Chinese steel companies are heard to be undertaking scheduled maintenance works at their mills in Sept’21, SteelMint gleaned from Chinese media reports. This move is likely to disturb the demand-supply dynamics of the Chinese steel market in the coming months.
According to provisional statistics as of 30 August, steel companies including Shaoguan Iron and Steel Co Ltd, Benxi Iron and Steel and Anshan Iron and Steel, Yonggang, Huaigang Special Steel, Juneng Special Steel and Zhougtian Steel, have announced shutdown and maintenance plans for Sept’21.
Supply-demand gap widens
eduction in steel production due to strict production curbs and scheduled maintenance are likely to disturb the demand-supply dynamics of the Chinese steel market in the coming months. Steel supply is expected to remain tight and inventory with mills will decline further.
On the other hand, demand for steel, especially of longs, will improve in the short-term as many halted construction projects in various regions of China will resume operations with improvement in weather conditions.
Chinese steel market optimistic, prices to go up
Market participants showed mixed reactions to this and on the changing demand-supply dynamics of the steel industry. Many traders see an optimistic and bullish trend as always in the peak season of September-October.
According to Hu Qimu, chief researcher of the China Steel Economic Research Institute, although steel demand from foreign countries has been restricted to a certain extent under regulations of export tariffs and tax rebates on steel products, after entering the peak season, the supply-demand relationship in the market is expected to remain tight.
He further said that even though prices of iron ore have fallen sharply, steel prices, supported by demand, do not have the basis for a sharp drop.
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