Under pressure from output reduction policies, Chinese steel producers have chosen to conduct overhauls of equipment in order to achieve their set output targets. Most steel mills are being required to limit this year’s output below last year’s level, Kallanish notes.
Guangdong Shaogang announced on Wednesday that in the second half of the year, two blast furnaces at the steel plant will be overhauled, reducing supply of pig iron by 400,000 tonnes in total. On the same day, Juneng Special Steel started the overhaul of its 1,250 cubic-metre blast furnace for 70 days, cutting 220,000 t/y of iron output in total. In addition, another seven steelmakers have announced plans that will reduce around 1.1 million tonnes of iron output in September.
In terms of the finished steel products, 17 producers including Tiangang, Benggang, Angang and Yonggang will reduce a combined 830,000t of long steel and 980,000t of flat steel output.
According to market rumours, Baowu Group has been notified that it must also keep this year’s output at the same level as last year. Sources estimate Baowu’s steel subsidiaries would need to reduce steel output by approximately 14-19mt from September to November to meet this goal.