Posted on 06 Sep 2023
For September, prices of construction steel comprising rebar and wire rod across China are projected to bounce back, though the room may be limited, Mysteel predicts in its monthly report. Firming production costs will likely lend the prices some resilience but uncertainties regarding steel demand may cause them to fluctuate frequently this month, the report said.
During the first half of August, Chinese construction steel prices fell to low levels before subsequently staying rangebound at lows, the report explained.
Consequently, the country's national price of HRB400E 20mm dia rebar, a barometer of steel-market sentiment, had slumped by Yuan 110/tonne ($15.1/t) on month to Yuan 3,776/t and including the 13% VAT as of August 31, Mysteel's assessment showed.
Output of construction steel may still have some space to decline this month, the report forecast, as integrated mills will continue to take the initiative in production curtailment, the report warned, noting the mills' rising production costs. Moreover, some mills had also received verbal notifications from government authorities to keep crude steel output flat this year, as Mysteel Global reported.
By end-August, weekly rebar output among the 137 mills nationwide Mysteel follows came in at 2.59 million tonnes, down by 110,500 tonnes on month or falling by 350,800 tonnes on year. Meanwhile, that of wire rod among the 92 makers Mysteel monitors shed 20,000 tonnes on month to 1.09 million tonnes and was also lower by as huge 330,000 tonnes on year, according to Mysteel's data.
The destocking of construction steel inventories may continue during September, a traditional peak month for steel consumption, the report suggested. "However, many traders said their confidence about demand was not so strong, and they were not willing to stock up steel products in large quantities," the report cautioned.
The combined inventories of rebar and wire rod held by the 184 steelmakers Mysteel monitors and at trading warehouses in the 35 cities under Mysteel's survey reached 9.14 million tonnes by the end of August, thinning by 221,600 tonnes on month or nudging down by 400 tonnes on year, the data found.
As for China's consumption of construction steel during August, the daily trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 trading houses quizzed by Mysteel averaged 144,701 tonnes/day, down 3.5% from the July average or slipping 6.1% on year.
Source:Mysteel Global
