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The announcement on Monday March 11 marks the steelmaker’s first cut since the beginning of 2013. It had kept its prices flat since mid-February.

After the adjustment, Shagang’s price for HRB400 rebar (14-25mm) is 3,900 yuan per tonne, 250 yuan per tonne lower than that during the first 10 days of the month. Its HPB300 wire rod (6.5mm) will be priced at 3,900 yuan per tonne, 100 yuan per tonne lower than early March.

“Shagang’s sales volume for its products is quite small. The prices had been too high for downstream users to accept,” a Shanghai-based trader said.

Shagang’s high prices had been met with resistance by distributors in Hangzhou. Several of them stopped selling Shagang’s products from last Friday.

Market participants believe the cut is the result of last week’s boycott.

“We heard that many distributors threatened to stop booking cargoes for the rest of March,” a Hangzhou-based analyst said.

Shagang’s new prices appear to have won the approval of traders.

“The cut was more than expected. Hangzhou’s boycott made the mill feel the pressure,” a trader in Guangzhou said.

March has so far seen demand recovering slower than expected. China’s spot rebar prices have been in a downtrend since late February.