Due to the weight of excess supply on the market, industry consultancy Umetal specified that the price of reinforcing bar, used in building construction, has been slashed by
10% by China's Hebei Iron and Steel Group, the world's fourth-biggest steelmaker.

The domestic prices were pushed down about 20 percent since early August due to unstable steel production in China, which hit a monthly record of 52.33 million tonnes in August.

The lower steel prices have led to slashing output by many small steel mills in China's top steel-producing province of Hebei; however, big steel mills have not followed suit. Analysts from industry and company officials predict a further price cuts.

While considering a company sales notice issued on Wednesday, Umetal said: "Hebei Steel, China's second-biggest steel maker and a major supplier to the construction sector, cut its benchmark reinforcing steel bar price to 3,550 yuan ($520) a tonne from 3,950 yuan, which was in place from the start of September."

It has appeared that the new price will come into effect from Wednesday. It was through a merger of the state-owned parents of Tangshan Iron and Steel, Handan Iron and Steel Co and ferroalloy producer Chengde Xinxin Vanadium and Titanium Co that Hebei steel was created.

The price for hot-rolled coil was also slashed by 400 yuan, or 10 percent, to 3,650 yuan a ton by the steel mill, which lags only Baosteel, parent of Baoshan Iron and Steel, in steel production volume in China.

Apart from this, it also decreased the price for cold-rolled coil, used by the automotive and appliance sectors, by 700 yuan, or 13 percent, to 4,650 yuan a ton.