The main contract for rebar futures on the Shanghai Futures Exchange fell below the 3,700 yuan/ton mark on Tuesday, closing at 3,685 yuan/ton, a decrease of 1.55 percent, hitting a new low for the year. Since April, the price of rebar has fallen by about 10 percent.

A day earlier, the China Iron and Steel Industry Association (CISA) held a meeting for the heads of 16 steel companies. While production and operations improved in Q1 compared to the previous quarter, they face difficulties in demand, market volatility and rising costs. CISA called on steel companies to reduce production.

Usually, this is the season of strongest demand, but 30 domestic steel mills have announced plans to halt production for maintenance.

In April, inventory was 11.7 million tons, a decrease of 3.9 percent compared to the previous month, but an increase of 4.2 million tons from the beginning of the year.

TANG Zijun, the vice chairman of CISA, said the industry had entered a period of adjustment. The global economic situation is not optimistic. Domestic recovery is slower than expected, and investment is getting weaker.

Most steel companies believe the market will face significant uncertainties in the second quarter and the second half. It is expected that volatile prices will generally weaken.