Posted on 05 Sep 2023
Rebar production among the 137 Chinese steelmakers nationwide quizzed by Mysteel over August 24-30 continued the decline that began in late July to hit a 6.5-month low of 2.59 million tonnes, new survey data show. During the survey week, output dropped for the sixth consecutive week, though at the faster pace of 1.8% or by 47,200 tonnes, as against the 0.1% dip in the prior week.
Survey respondents attributed the further drop in rebar output over the survey period to the fact that many mills had switched from producing long steel products such as rebar to flats, which were considered more profitable.
Subsequently, rebar rolling capacity utilization among these surveyed steel producers slid for the sixth week, down 1 percentage point on week to 56.7%, while the operational rate among the rolling mills reversed up a small 0.3 percentage point on week to 45.9%.
The survey also showed that steel mills in North China's Hebei, East China's Anhui, Northeast China's Heilongjiang, Southwest China's Sichuan and Northwest China's Xinjiang witnessed significant production reductions in rebar output last week.
China's spot rebar prices had been propped up by better market sentiment following favorable policies introduced by the central government, as well as high steelmaking raw materials prices, according to the survey. Meanwhile, hopes for rising demand among end-users during the traditional peak season for steel consumption over September-October also provided impetus for the uptrend in prices, the survey noted.
As of September 1, China's national price of HRB400E 20mm dia rebar, for example, had gained by Yuan 24/tonne ($3.3/t) on week to reach a near one-month high of Yuan 3,804/t including the 13% VAT, according to Mysteel's assessment.
However, spot trading of construction steel including rebar, wire rod and bar-in-coil among the 237 Chinese steel trading houses under Mysteel's tracking dwindled by 7,609 tonnes/day or 5% on week to average 145,894 t/d over August 28-September 1. Survey respondents cited shrinking demand in southern China for this, as local building activities had been affected by Typhoon Saola.
Meanwhile, lower output saw rebar inventories at the 137 surveyed steel producers decrease for the third week, down 0.5% or 10,500 tonnes on week to 1.96 million tonnes as of August 30. In parallel, the volume at the commercial warehouses in 35 Chinese cities Mysteel follows also declined for the third week, down 1.3% or 78,100 tonnes on week at 5.82 million tonnes as of August 31.
Source:Mysteel Global
