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Four major Chinese stainless steel mills, including the two largest, Taiyuan Iron and Steel (Taigang) and Baosteel, plan to cut production by 20 to 30 percent in July.

"Top officials from the mills have reached a verbal agreement on a plan to cut the production of slab steel, but detailed moves will still be subject to the executives' individual decisions," a source with one of the mills said.

The two other stainless steel mills are a Chinese unit of South Korea's POSCO in Zhangjiagang, Jiangsu Province, and Lianzhong Stainless Steel Corp in Guangdong Province.