Posted on 20 Aug 2024
Production of rebar across China during January-July declined by 13.4% on year to 117.2 million tonnes, with last month's output alone reaching 5.6 million tonnes, according to the latest data released by the country's National Bureau of Statistics (NBS).
Compared with July last year, last month's rebar output registered a 21.6% fall, while compared with June, it was lower by 14.2%, Mysteel Global notes from the NBS statistics.
More Chinese steelmakers had reduced their production or halted operations for maintenance stoppages during July in response to deepening losses on rebar sales and weak demand from end-users, sources said.
Mysteel's survey on rebar rolling capacity utilization among the 137 Chinese steelmakers it regularly monitors was on par with the NBS result, as the run rate had slid 6.2 percentage points on month to 47.5% by the end of July, or 12.6 percentage points lower on year.
Last month, the average losses on selling rebar borne by the 91 blast-furnace mills nationwide that Mysteel tracks reached Yuan 249/tonne ($34.9/t), widening by some Yuan 151/t on month. The sharp fall in spot rebar prices was blamed, even though raw materials costs for the mills had eased moderately, Mysteel Global notes.
China's national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment under Mysteel's assessment, had dived by Yuan 245/t on month to Yuan 3,381/t and including the 13% VAT as of July 31.
For iron ore prices, Mysteel SEADEX 62% Australian Fines, for example, sat at $100.6/dmt CFR Qingdao as of the same day, slipping by $6/dmt on month. However, the small reduction in steelmakers' production costs was offset by the plunge in domestic steel prices last month.
Domestic long steel demand remained lackluster during July – a low month for steel consumption – as sweltering temperatures and frequent rains impacted spot steel trading activity. Mysteel's survey among the 237 trading houses it checks across China showed that their trading volume of rebar, wire rod and bar-in-coil averaged 116,495 tonnes/day last month, down by 2,917 t/d or 2.4% from that for the prior month.
In addition to the bleak demand, domestic mills and traders made concessions to their offering prices to facilitate rebar sales, hoping to find buyers for their existing stocks before new production and quality standards for rebar take effect in September, as reported.
Rebar, the most widely-used steel product in China, accounted for 14.4% of the country's total finished steel output for the first seven months and 13.7% of output for July – equivalent to 813.4 million tonnes and 114.4 million tonnes respectively, according to the NBS data.
Source:Mysteel Global
