News

SHANGHAI, May 29 (SMM) – Rebar prices inched up in Guangdong and Guangxi as output is likely to be affected by the central government’s environmental review initiative that is set to start in the next few days, SMM learned.

However, this is unlikely to reverse the weak trend of rebar prices given current high levels of inventory in Guangzhou.

On Tuesday May 29, rebar prices rose 20 yuan/mt to 4,110 yuan/mt in Guangdong, and gained 30 yuan/mt to 4,130 yuan/mt in Nanning of Guangxi, SMM learned.

One focus of the environmental probe will be on substandard electric arc furnaces (EAF) steel mills and the production of ditiao steel.

Most steel mills in Guangxi told SMM that they have yet to receive any cutback notice as of Tuesday May 29, but some have started to prepare for a production cut. Some local mills were heard to have shut down.

In Guangdong area, an environment inspection team conducted checks in Jieyang on Sunday May 27, and shut down induction furnaces that failed to meet environmental standards. These induction furnaces produced substandard steel billet, which would be delivered to billet mills or EAF mills for further processing. The move to ban these induction furnaces will lead to output reduction of some steel mills.

Last week, the town government of Dainan in Jiangsu province announced that it will permanently shut all induction furnaces from May 24 in an effort to crack down on ditiaosteel.