Due to the weak domestic and foreign demand, some Chinese blast furnace plants are preparing to reduce production in August. The rise in the price of rebars and steel billets in China last week was the effect of production reduction. However, most of the reductions are short-term, and few blast furnaces shut down.

According to the analysis of market participants, the above-mentioned reduction in production is spontaneous and can easily resume production. Once the steel price rises, the production capacity can rise rapidly. It was estimated that the rise in steel price driven by it is short-term.

It is understood that most steel mills will not take the initiative to reduce crude steel production, because steel mills are worried that reducing production now under the government's climate control may reduce the production quota in 2023.

Due to the higher margin of electric furnace production, some electric furnace plants may restart, and because it is difficult to collect scrap, most steel plants haven’t started yet.