Tangshan Guofeng Steel, a privately held mill in the province has put forward maintenance since August and closed four BFs. However, the mill has yet to halt operation completely since they are holding over 400,000 tonnes of raw materials. Its neighbor, Tangshan Beishiti Steel Group is reportedly idling two thirds of the capacity for last four weeks.

     Mr Wang Dayong director of Hebei Metallurgical Association said that steep input cost, strengthening RMB, export setback and weakening down stream demand are believed to underlie the large scale output cutback.

     Steel mills are now strapped with spiking raw materials cost but tumbling steel price. Machinery industry, one of the major steel-consuming sectors is taking far less steel products at the moment due to shrinking export order. Moreover, slacking demand from real estate sector is set to continue into following months. And the shipbuilding industry has reported contracting drop 33.5% in the first five months of this year.

     Mr Qi Xiangdong vice secretary general of CISA said that nevertheless, current bitter winter might help weed out the obsolete steel capacity and consolidate the industry. That's why CISA official is confident that the steel industry is not facing any downturn yet. The output cutback can be attributed to the Games, which has caused some disruption in sales and transport for the mills.