The maintenance commenced on February 13 with no completion date mentioned is estimated to reduce Shagang’s rebar output by 5,400 MT/day in total, Mysteel understood from a market survey.
“It just a regular maintenance. We have planned this long before,” the Shagang official stated, clarifying that it had nothing to do with the virus outbreak.
China’s finished steel output has been declining as many other Chinese steel mills have opted to scale down their production by idling their rolling mills for maintenance since the start of February, with many being unscheduled either because of the remaining weak downstream demand or tightness in raw material supplies because of the transportation bottleneck amid the fight against the NCP, as reported.
The epidemic delayed the resumption at many construction projects to late February at the earliest, and transportation both for cargoes and passengers have been seriously hindered with many highways have been blocked and over 20 cities in China are in the lockdown mode to minimise the further spread of the virus, as reported.
The Shagang official acknowledged that the company’s cargoes transportation has been affected too.
“Shipments (for both steel and raw materials) have been slowed, as port operations have not been resumed to the full, and trucking is only normal within our city (Zhangjiagang) not to the other cities or provinces,” he said.
Many of Shagang’s steel sales agencies, therefore, cannot receive deliveries from the mill and Shagang’s finished steel inventories at the works have been much higher than that before the Chinese New Year holiday of January 24-February 2, the official admitted.
Shagang will need to plan out properly to control its finished steel within a reasonable level, according to him.
For now, Shagang’s rebar price has not been affected, as the mill has rolled over its long steel list prices for sales over February 11-20 from the prior ten days, still offering its HRB400 16-25mm dia rebar at Yuan 3,880/MT ($554/MT) EXW and including the 13% VAT, though the spot rebar price in Shanghai was at Yuan 3,440/MT as of February 13, or down Yuan 310/MT from January 23, the last working day before the Chinese New Year holiday.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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