Reuters quoted industry consultancy Umetal as saying that several major Chinese steel mills cut their product prices for September sales by up to 19% from their August levels recently as spot prices continued to fall on weak demand.
The price cuts come as Chinese spot steel prices languish amid concerns that tighter bank lending, the government's crackdown on overcapacity in the steel industry and record output, may end the months-long price rally. Spot price of iron ore a key steelmaking ingredient has also been volatile recently falling to a more than two month low recently.
Umetal said citing Hebei sales notice that Hebei Iron and Steel Group, the country's No. 2 steelmaker, lowered the price for its major reinforcing steel bar by CNY 950 or 19% to CNY 3,950 a tonne, effective on Tuesday.
Umetal said Shagang Group, China largest private-sector steel mill and the largest rebar producer also reduced construction steel prices by CNY 400 or about 9% to 10% for September sales.
Mr Julian Zhu Deutsche Bank analyst said "We expect more major mills to follow suit because of the need to destock while maintaining full operational capacity to generate cash flow."
Trade sources said Baoshan Iron and Steel Co is expected to lower sale prices for major hot rolled and cold-rolled steel products for October next week after raising them since July.