China's rebar steel prices surged after the government closed medium frequency furnaces to stop production in a bid to crack down on low quality steel.
Prices of rebar steel surged 14.4 percent to 3,810 yuan ($561) per ton by yesterday as production shrank to 62.5 million tons from January to April, down 2 percent from a year ago, according to lgmi.com, a domestic steel consultancy.
The closure is in line with China's policy to clear "ditiaogang," referring to low quality steel made from scrap metal, by the end of June.
The supply of rebar has been hit as medium frequency furnaces are the main facility to make it, said Wang Guoqing, research director at lgmi.com.Such furnaces produced about 6,000 tons of rebar last year.
