According to Mr Liang GM of Shanghai Hualei Enterprise Development Co, steelmakers have to cut or limit productions in order to stabilize the market that has been decreasing at an unexpected pace.

He said that the construction steel market has fallen above the traders' expectations. He thought the fundamental reasons behind the decrease are oversupply and insufficient demand. In this case, he called that steelmakers should take the initiative to cut or limit productions to hold on the price.

For the traders, Mr Liang said they should cut down orders at the steelmaker to reduce losses given that the market price has lagged behind the ex mill prices and take in some low cost resources at the market to complement or restructure their inventory while make great efforts to develop new end users.

It's the time to embark on destocking of the second time this year. The first destocking led to scaled down inventory and consecutive falls of it for several weeks, but the figure has rebounded recently.

• [Editor:editor]