According to a survey by local industry analysts, collapsing global steel markets have caused the closure of half of the steel making capacity in Tangshan. Empty trucks line the roadside and most shops have closed their doors. The closures have led to severe job losses and raise more questions about the health of the Chinese economy.

 

Ms Yao Guoying analyst with Steel Bus, a Tangshan industry information service, said that "More than 50% of blast furnace capacity in the Tangshan area is idle and there are no signs of any improvement. Very few are preparing to re start, and those that are very small."

 

Steel Bus survey shows steel mills with large blast furnaces remain in operation, but at least 24 other mills have shut most or all of their capacity. Tangshan Steel's 3 million tonne ship plate factory near the port of Caofeidian was said to be operating at close to capacity, thanks to continuing orders from shipbuilders in South Korea.

 

Analysts are struggling to understand the panic selling that has swept through Chinese steel mills and traders and caused average steel prices to fall about 40% since July. Prices this week appear to have stabilized at levels below the cost of production for most Chinese mills, particularly those that are still consuming stockpiles of iron ore and coking coal purchased at earlier high prices.

Chinese rebar and wire rod export prices drop

 

It is reported that there have been few construction steel exports in October on substantial price drop and weak overseas demand. Steel mills indicate that there probably would be a 70% decrease in export tonnage for November shipment.

 

Domestic market prices continue to see some rebound. In Shanghai, HRB 335 20 millimeter rebar is being quoted at CNY 3550 per tonnes; HRB 400 grade material is being quoted at CNY 3630 per tonnes, up CNY 300 per tonnes from last Friday. That for commercial wire rod jumps by CNY 200 per tonnes to CNY 3540 per tonnes and that for hi speed material saw an increase of CNY 220 per tonnes to CNY 3580 per tonnes.

 

Prevailing export offer goes at USD 580 per tonnes to USD 600 per tonnes fob and there are also lower levels at USD 500 per tonnes to USD 550 per tonnes fob. Some are even quoting at USD 480 per tonnes to USD 500 per tonnes fob. However there are still not much order Official quotations for Wire rod is about USD 600 per tonnes fob and real transaction price is negotiable.

 

Editor:    Ivy

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