China’s steel mills and traders are grappling with increasingly tight cash flows due to soaring finished steel inventories and slow sales, which are likely to result in production cuts and lower pricing, market sources said Monday. Mills and traders have significant money tied up in inventories and the longer they hold onto stock, the more interest they are required to pay. Traders, in particular, tend to secure collateral loans. Steel output cut plans announced so far by mills will result in a 2.6 million mt of pig iron loss in March. However, production cuts are likely to continue to deepen in March and exceed the February pig iron loss, which S&P Global Platts estimates was 4.5 million mt. This equates to around 7.5% of pig iron output in February 2019. Dazhou Iron & Steel, or Dagang, an integrated long steel producer in Sichuan province in […]