China steel bar producers call for authorities to restrict output amid price slump
China steel bar producers call for authorities to restrict output amid price slump
Fifteen of China's major steel bar producers have unanimously called on authorities for measures to restrict steel bar output to support prices, the China Iron and Steel Industry Association said on Tuesday.
Steel bar prices have seen "irrationally" sharp declines amid ongoing weakness in China's real estate and infrastructure sectors, leading steel bar producers to face narrowing margins and losses, the association said.
Steel bar demand from infrastructure construction has contracted due to spending cutbacks by indebted local governments. Twelve cities and provinces with high debt burdens have delayed or halted projects, the association noted.
Prices of steel rebar on the Shanghai Futures Exchange have fallen by 14.2% since the start of the year.
Authorities should also strengthen supervision of speculation in the futures market, it said.
Facing weakening demand, some suppliers have already taken measures to support prices. Of the total furnace capacity in Shanxi province, 38.4% has been shutdown for maintenance, the association said.
China's steel reinforcing bar output dipped 0.3% year-on-year to 32.1 million metric tons in the first two months of this year, official data previously showed, accounting for 19% of the country's total crude steel output during the period.
This article was produced by Reuters news agency. It has not been edited by Global South World.
