Monday, May 16,
China’s Steel sector is likely to face severe power shortages this summer,.* but the problem of oversupply in the sector will not ease in the months ahead, said CISA on Monday.
“Steel mills are highly energy-intensive consumers, so they will definitely be the target of electricity supply restrictions, and the impact on steel output and downstream users will not be negligible,” the China Iron and Steel Association (CISA) said in its monthly report.
China is facing its worst power shortages since 2004, and heavy industries like steel are likely to be the first to suffer as regulators seek to guarantee supplies to ordinary consumers.
However, with many larger mills running their own independent power plants, they have not yet been affected by electricity shortages, but they could also take the opportunity to overhaul their facilities as steel demand remains weak.
“We may start overhauls of cold-rolling facilities because of falling orders, but there is no intention to cut production from blast furnaces yet,” said a senior official with China’s second-biggest steelmaker Baosteel, parent of Baoshan Iron & Steel .
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