China – Coal Shortage & Soaring Cost – Rebar Mills Cut Production

Tight coking coal supply and soaring costs are forcing a number of Rebar Mills in China to cut production.
As per reports many of the rebar mills in northern China have left their blast furnaces to idle away for the reason of maintenance means that the production are shut down for time being.
A mill source in northeastern China said “Mills that have less steel to sell are either keeping offers high or have stopped quoting altogether”.

The climb in coking coal prices, which have risen 275% since the start of the year to $306mt CFR China has seen producers of long and flat steel deal differently, as the higher costs were mostly passed down with greater success by the producers.

Also in eastern China, rebar mills have plans to conduct maintenance this month, although they insisted that the outages were routine and conducted annually, and will have little impact on overall output.

Any production cut will likely have a limited impact on domestic markets, as rebar demand in China typically eases from November due to a slowdown in construction activity during winter.

The stockists in Hong Kong and Singapore are citing difficulty in securing material, as the mills that are conducting maintenance are also active exporters.