Chinese steelmakers to dent oversupply

SHANGHAI: Chinese steelmakers are bringing forward plant maintenance as they look to curb oversupply that helped knock nearly a third off prices last year in the world’s top producer of the alloy, industry sources said.
Leaner demand in winter, when construction activity typically slows, has also forced steel mills to keep low iron ore inventories, piling more pressure on prices for the steelmaking ingredient that have plunged close to their weakest in 5-1/2 years.
Chinese steel producers, including the biggest private mill Jiangsu Shagang Group, state-owned Wuhan Iron & Steel Group and Hebei province-based Tangshan Iron & Steel, are scheduling maintenance on some facilities, according to industry consultancy Custeel. Those companies did not immediately respond to requests for comment from Reuters.
“The difference this year is that in order to trim production, many mills in northern China have brought forward maintenance plans, which traditionally happen during the Lunar New Year, as prices have fallen too quickly and many rebar producers have been losing more than 100 yuan ($16) a ton,” said Cheng Xubao, an analyst with Custeel who has spoken to several mills.