Posted on 20 Jun 2023
Rebar production among the 137 Chinese steelmakers regularly tracked by Mysteel dropped for the second week over June 8-14, inching down by 0.4% or 9,700 tonnes on week to reach 2.69 million tonnes, according to the latest weekly survey. Output slid at a slower pace compared with the 1.4% decline in the prior week, however, as a slight recovery in mills' steel margins had boosted their enthusiasm for producing, survey respondents said.
Nonetheless, as many steelmakers resumed production during the latter part of the survey week, this resulted in a small on-week decline in rebar output, according to the survey. The increment in rebar output may be manifested during the next survey week, survey respondents noted.
Steel producers in regions except East, South and North China posted on-week inclines in their rebar output, and those in Northeast China's Jilin and Central China's Hubei showed significant rises in production, the survey found.
Over the period, rebar rolling capacity utilization among the surveyed producers declined for the second week, down 0.2 percentage point on week to 58.9%, while the operational rate of the rolling mills at the surveyed makers rebounded by 2 percentage points on week to 47.2%, according to Mysteel's data.
Domestic steel prices have been strengthening, bolstered by market expectations of macroeconomic policy support, with the country's national price of the HRB400E 20mm dia rebar, for example, rising by another Yuan 57/tonne ($8/t) on week to refresh a 1.5-month high of Yuan 3,884/t including the 13% VAT as of June 16, according to Mysteel's assessment.
Over June 12-16, the spot trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 steel trading houses under Mysteel's tracking averaged 165,787 tonnes/day, up by some 15,727 t/d or 10.5% on week.
The improvement in spot sales was mainly due to the speculative buying among traders, while actual demand from end-users stayed flat as persistent rains hit southern China and heatwaves scorched northern regions, sources said.
The lower output and a modest gain in trading led rebar inventories held by both mills and traders to decrease, with the tonnage at the 137 mills declining for the sixth consecutive week, down 21,400 tonnes or 1% on week to 2.02 million tonnes as of June 14.
Meanwhile, the volume at commercial warehouses in the 35 Chinese cities Mysteel canvasses also continued the slow decline begun in late February, with the stocked tonnage falling by 238,200 tonnes or 4.2% on week to 5.46 million tonnes as of June 15, making for a 16-week decline.
Source:Mysteel Global
