Steel rolls are seen at a factory of Ansteel in Anshan City, northeast China's Liaoning Province, Aug 19, 2021. Photo:Xinhua

More than 40 of China's major mangalloy firms agreed to reduce production by more than 60 percent starting from Friday and also vowed to minimize the purchase of mines abroad to avoid risks as the industry is experiencing "severe losses."

Recently, due to the "extremely weak" steel market, steel mills have begun to limit production in a larger scale and the demand for manganese alloys has continued to slump, the China Ferroalloy Industry Association Manganese Professional Committee said in a statement on Friday. 

Facing the current situation of the market, the committee said it organized an "urgent meeting" on Friday morning with more than 40 of its members during which they agreed to strictly reduce mangalloy production by more than 60 percent of, minimize purchase of mines overseas and prepare for three years of hardships by applying internal skills and reducing costs.

Wang Guoqing, research director at Beijing Lange Steel Information Research Center, told the Global Times on Friday that the whole steel industry is now under pressure amid the rate hikes of the US Federal Reserve.

Commodities, including the steel, have also experienced volatility, Wang said, noting that firms are prevented from buying more at the moment to cope with a further slump.

The survey of 44 economists conducted from July 15 to 20 says they forecast the Fed will raise rates by another 25 basis points in early 2023, reaching a peak of 3.75 percent before pausing and starting to cut rates before the end of the year, according to  Bloomberg on Friday.

Customs data indicate that the total exports of ferroalloys in June 2022 reached 144,754.099 tons, a decrease of 14.09 percent month-on-month, down 4.51 percent year-on-year. 

Total imports of ferroalloys in June 2022 were 581,227.817 tons, a drop of 12.98 percent month-on-month while seeing a year-on-year increase of 29.52 percent.

Global Times