Posted on 06 Nov 2023
Rebar production among the 137 Chinese steelmakers regularly monitored by Mysteel grew for the third straight week over October 26-November 1 to reach 2.62 million tonnes, though the pace had slowed to a small 0.6% or by 15,100 tonnes on week, according to the latest survey. During the previous week, output among the surveyed mills had increased by 1.8% on week, as reported.
Survey respondents pointed out that some Chinese steel mills, particularly integrated mills, had commenced maintenance work late in the survey week, which may cause next week's long steel production result to decline markedly.
Rebar output over the survey week among steel producers in Southeast China's Jiangxi, Northeast China's Liaoning and Central China's Hunan rose significantly on week. Conversely, mills in Northeast China's Heilongjiang, East China's Jiangsu and Central China's Henan posted on-week falls in rebar output, according to the survey.
During the period, rebar rolling capacity utilization among the sampled producers gained for the third week, albeit by just 0.3 percentage point on week, to 57.5%. Meanwhile, the operational rate at the surveyed makers reversed down by 2.6 percentage points on week to 43.6%, Mysteel's data showed.
Chinese rebar prices had continued their upward trajectory in both the spot and futures markets, lifted by the central government's policy boost and improved market sentiment. As of November 2, the country's national price of HRB400E 20mm dia rebar, under Mysteel's assessment, had strengthened by Yuan 60/tonne ($8.2/t) on week to nearly a 6.5-month high of Yuan 3,900/t including the 13% VAT.
In parallel, the most-traded rebar contract on the Shanghai Futures Exchange for January 2024 delivery jumped by Yuan 111/t from the settlement price on October 27 to close at Yuan 3,805/t when the daytime trading session ended on November 3.
The spot trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 Chinese steel trading houses under Mysteel's survey picked up by 9.7% on week to average 167,918 tonnes/day over October 27-November 2, indicating that spot trading was not as weak as market participants had expected.
On the other hand, rebar inventories at both the 137 steel mills and among traders in the 35 Chinese cities Mysteel tracks thinned further, with the former falling for the third week by 5.4% or 101,500 tonnes to 1.77 million tonnes as of November 1, and the latter sliding for the fourth week, to 4.02 million tonnes as of November 2, lower by 6% or 254,600 tonnes on week.
The arrival of rainy and snowy weather in some parts of northern China has impacted the destocking of steel inventories and demand from end-users, and the negative effects may gradually strengthen later, survey respondents suggested.
Source:Mysteel Global
