Several steel mills in China are likely to suspend production for planned maintenance in September, according to local media. But as demand is expected to pick up amid improving weather, the Golden Nine Silver Ten season and upcoming infra projects, steel prices could find support in the coming days.
On one hand, production control will remain strict with the finalization of ecological protection inspectors in various regions and also some provinces like Guangxi are tightening energy consumption. In Guangxi steel production in September is likely to be reduced by 20pc as mills suspend production for maintenance.
While on the other hand, fiscal policies in terms of issuance of local bonds for infrastructure projects are expected to support construction activities as well as post-flooding reconstruction in regions like Henan, spurring demand for steel products. Given this background, social steel stock is expected to decline on improving supply-demand dynamics, according to industry experts.
Steel mills, including Shaogang, Anshan Iron and Steel, Benxi Iron and Steel, Huaigang Special Steel, Yonggang, Juneng Special Steel, and Zhongtian Steel have announced planned production suspension for maintenance in September.