Based on the current situation in the domestic steel market, Chinese steelmakers may start to cut back their production in the coming period, the China Iron and Steel Association (CISA) has said.
As indicated by the sales agents of Shandong-based Jinan Steel, a subsidiary of Shandong Steel Group, the company is ready to cut back production in the period ahead. The production cutbacks may be attributed to the continuing decreases in prices and increased inventories in the steel market.
Meanwhile, as stated by traders in northern China, the high steel inventories in Hebei Province have been at very high levels. However, if steel prices continue their downward movement, the steel inventories in the market will increase even further.
Taking auto sheet as an example, a sales agent for Beijing-based steelmaker Shougang said that demand for auto sheet from the domestic market has shrunk by at least 50 percent year on year in the first half of the current year.