Northern Chinese steelmaker Hebei Iron and Steel has stated that, due to restrictions on electricity consumption, it expects to see a shortfall of 1.5 million mt in its crude steel output in the September-December period this year, equal to a drop of six percent in its targeted annual crude steel output for 2010, though the influence on the company's profits is harder to estimate.
From September 3, municipal and district governments in Hebei province have been implementing restrictions on electricity usage for industries with high levels of energy consumption and pollution. Tangshan Iron and Steel, Handan Iron and Steel, and Chengde Iron and Steel - subsidiaries of Hebei Iron and Steel Group - have all reduced their steel outputs.
In the context of the power restrictions, Hebei Iron and Steel Group made upward adjustments to its steel prices for mid-September. Its wire rod price for mid-September has risen by RMB 200/mt ($29.76/mt) to RMB 4,450/mt ($662.2/mt), its price for rebar in coil is up by RMB 200/mt ($29.76/mt) to RMB 4,650/mt ($691.96/mt), while its rebar price has increased by RMB 180/mt ($26.76/mt) to RMB 4,400/mt ($654.76/mt).
US$1 = RMB 6.72