Fifteen major steel producers in China have jointly appealed to authorities for measures to curb rebar output, citing a significant decline in prices, the China Iron and Steel Industry Association said on April 2.

The association highlighted rebar prices have experienced "irrational" drops, primarily attributed to ongoing weakness in China's real estate and infrastructure sectors. This downturn has squeezed profit margins and led to losses for producers.

A key factor contributing to the decline in rebar demand is the reduction in infrastructure construction projects due to spending cutbacks by heavily indebted local governments. 

Since the beginning of the year, prices of steel rebar on the Shanghai Futures Exchange have plummeted by 14.2%, further exacerbating the challenges faced by producers.

In addition to output restrictions, the association emphasized the need for strengthened supervision over speculations in the futures market to stabilize prices effectively.

Some suppliers have already taken steps to support prices. Notably, 38.4% of the blast furnace capacity in Shanxi province has been temporarily shut down for maintenance, according to the association.

Official data released earlier indicated a 0.3% year-on-year decrease in China's steel rebar output, amounting to 32.1 million tonnes in the first two months of the year. This output accounted for 19% of the country's total crude steel production during the same period.

(Writing by Alex Guo  Editing by Harry Huo)
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