Following steelmakers in Shaanxi, Shanxi, Gansu and Sichuan cutting their production earlier this month, six major steelmakers in Shandong Province on August 13 announced their decision to cut production of rebar and wire rod, which are mainly used in construction industry, by 400,000 mt, which may help to bolster steel prices.
Meanwhile, steelmakers in Shandong Province will decrease the scrap usage, to lower the inventory level of high-priced raw materials.
At the same time, Shandong steelmakers stated that they will share information and do price coordination with steelmakers in other provinces, to maintain stability in the steel industry.
As the end of August 13, rebar main contract futures prices (RB1910) were recorded at RMB 3,677/mt, up 2.14 percent compared to the previous trading day, though market participants in spot market mentioned their transaction activities have not seen significant improvement yet. They thought the decreases in the inventory level of rebar and wire rod in spot market will be more important, which still need more time to confirm. Futures opened higher again on August 14 – at RMB 3,683/mt.