Posted on 08 May 2023
Prices of construction steel products across China may see signs of stabilizing or even achieve a rebound this month, in anticipation of domestic steelmakers' output cuts which may last for several weeks in a row, Mysteel predicted in its latest monthly report.
In April, core construction steel products such as rebar witnessed a steep slide in prices as useful demand from end-users declined from March while production costs dropped with tumbling raw material prices, according to the report.
The spot trading of construction steel comprising rebar, wire rod and bar-in-coil among 237 trading houses Mysteel follows nationwide fell by 4.9% on month or down 4.1% on year to average 163,552 tonnes/day in April, a rather low level during the country's traditional peak month for steel consumption.
On the other hand, domestic steel construction steel prices lost cost support last month when the prices of major steelmaking materials tumbled. For example, the country's national composite coke price under Mysteel's assessment plunged by Yuan 400.9/tonne ($58/t) on month to Yuan 2,287.4/t including the 13% VAT as of April 28.
China's national price of HRB400E 20mm dia rebar, a barometer of domestic steel market dynamics, was assessed by Mysteel at Yuan 4,058/t including the 13% VAT on average during April, slumping by Yuan 273/t on month.
Consequently, in late April, both blast-furnace and electric-arc-furnace steel mills across China had conducted maintenance works on their facilities and trimmed their production to mitigate profit losses, the report found.
The mills' production cuts saw rebar output among the 137 Chinese steel mills under Mysteel tracking settled at 2.83 million tonnes over April 20-26, slipping 6.2% on month or 5.8% on year. Within the total, mini-mills trimmed their rebar production by 136,500 tonnes on month, sharper than the 50,500 tonne fall seen by integrated mills, the report noted.
"If the weekly rebar production stands at around 2.65 million tonnes, there will be clear changes between market supply and demand," according to the report.
Source:Mysteel Global
