Chinese major steelmaker Shagang Group will implement maintenance works at its 1,450 mm hot rolling production line during September 13-23, impacting production by 11,000 mt per day, while Inner Mongolia-based Baotou Iron and Steel will put its CSP1,780 mm hot rolling line under maintenance for 10 days in September, likely affecting production by around 10,000 mt per day, and will carry out maintenance works at its 2,250 mm rolling line for 10 days in October, impacting around 14,000 mt of output per day.
Accordingly, the resulting overall hot rolled coil (HRC) production shortfall will reach at least 210,000 mt in September and 140,000 mt in October, as SteelOrbis has been informed by its sources.
The reduced production of HRC may prevent prices from resuming their downtrend in September even if overall demand stay slows. In August, average prices for Chinese HRC lost RMB 200/mt or $28/mt due to the supply-demand imbalance. However, prices have rebounded by RMB 40/mt ($5/mt) in early September, reaching RMB 3,720/mt ($525/mt) on September 6 amid mostly improved sentiment, while fundamentals have stayed weak.