From Reuters —

BEIJING (Reuters) – 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, April 2.

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.

The surging American economy is not a wide-open target for Chinese steel makers dealing with the Chinese downturn. The massive bipartisan $1 trillion Infrastructure Investment and Jobs Act signed by President Biden in April 2022, and the Inflation Recovery Act, require that U.S. steel used in all its projects – from bridges to roads to broadband internet. Foreign steel can be used only by obtaining a special waiver.

(Reporting by Andrew Hayley and Amy Lv; Editing by Devika Syamnath)