It is reported that against the backdrop of diving steel prices and highly hovering materials costs, steelmakers in Sichuan follow suit and have launched production trimming for the good of maintaining prices.

 

Insiders believed the current domestic basic steel varieties offers are approaching the bottom line. The downslide of steel prices after the National Day holiday is remaining the momentum. Statistics showed that rebar and wire rod have dropped to CNY 3500 per tonne from earlier CNY 4300 per tonne a slide of CNY 700 per tonne to CNY 800 per tonne. In plate market, prices plunged by CNY 1000 per tonne from CNY 5800 per tonne before the holiday to CNY 4800 per tonne.

 

To minimize the losses from the downtrend of the market, Hebei Iron & Steel Group took the initiative to slash production by 20% after the holiday and lately announced another 10% to 20% cut based on the previous move. Then many steel giants like Shougang, Jinan Steel have follow suit. As a leading official with Sichuan Desheng Iron & Steel Group said, the company is certain to bear losses if not to cut back production. At the same time, some important makers such as Pangang Chendu Iron & Steel and Weiyuan Steel in southwest area are in the line.

 

The National Development & Reform Commission then made an emergence apprise, calling to stabilize the important goods' prices for the reconstruction of Sichuan shake-stricken area, especially steel products and cement, by adopting temporary price intervention.

 

Insiders believed that the impact from the steelmakers' move can hardly be figured out but there is slim scope for steel prices to further slip. In specifics, basic steel products such as rebar is unlikely to slide greatly as it has retreated close to the cost bottom line, while cold rolled steel as well as some high value added products are expected to have wide room for trimming.

 

(Source: Chengdu Business Daily)

 

 

Editor:    Ivy

M S N:   noble-ferroalloys@hotmail.com

E-mail:    tiandandan226@yahoo.com.cn

Write to editor: service@ferro-alloys.com