As per the latest report by Xiben New Line Stock Co, the spot price of imported iron ore has decreased by 20% in May while domestic crude steel production hit a new record high with highly piling construction steel inventory. Some Chinese steelmakers plan to cut their steel production.

A certain general manager from the largest steel trade company in Beijing unveiled that some mills do decide to start overhaul in June. As a result, steel production will absolutely decline. However, the decrease rate is uncertain right now.

China Securities Journal cited last Friday that 19 plants in North China plan to suspend or cut their production. The involved ones are Hebei Jinxi Steel Stock Co and Tangshan Guofeng Iron and Steel Co. Well an administrant from Hebei Iron and Steel Group Corp noted that this group has never announced any production decrease planning.

Mr Liu Bin analyst from Mysteel figured that as a matter of fact, some small sized steel making mills has slashed their production since end April and the present operating rate is less than 50%.

The steel prices and downstream orders keep falling down for the moment. Furthermore steelmakers are stepping into high cost period. If steel prices fall back further in the future, steel mills will have to cut production.

• [Editor:editor]