27 September 2012 Last updated at 03:41 GMT Share this pageFacebook Twitter Email Print Share this page

Baosteel, as it is known, said it closed the plant in Luojing, Shanghai, to avoid increasing operating losses.

China is the world's biggest producer of steel and prices have fallen this year.

Steel makers in China have been struggling as Beijing puts curbs on the property sector to bring down prices.

In a statement to the Shanghai Stock Exchange, Baosteel said a downturn in demand in the slab market prompted the shutdown. It did not say when production would resume.

The plant in Shanghai mainly makes steel slabs used in ships and manufacturing.

Data published by HSBC on 20 September showed that industrial activity remains subdued across China, with the purchasing managers index showing a contraction for another month.

Steel production has slowed and iron ore prices have fallen about 25% this year.


Analysts say that the low prices mean mills are under pressure and that more production cuts are expected from steelmakers in China.