Posted on 10 Oct 2024
Prices of construction steel in China including those of rebar and wire rod are expected to remain on their upward trajectory in October, driven by seasonal demand upticks and supportive macroeconomic policies, Mysteel forecasts in its latest monthly report. However, while both demand and production are tipped to rise this month, the report expresses caution over the pace of output growth and fluctuations in spot steel trading.
The report notes the substantial gains in Chinese construction steel prices seen toward the end of September that coincided with a notable recovery in market sentiment.
As of September 30, Mysteel's assessment showed that China's national price of HRB400E 20mm dia rebar, a bellwether of the country's steel-market dynamics, had soared by Yuan 607/tonne ($85.9/t) on month to Yuan 3,944/t and including the 13% VAT.
During October, construction steel output is forecast to peak in the latter half of the month, propelled by recent improvements in profitability among mills.
By end-September, weekly rebar output among the 137 mills that Mysteel tracks nationwide came in at 2.05 million tonnes, up 432,000 tonnes or 26.6% on month. Meanwhile, output of wire rod among the 92 mills Mysteel monitors climbed by 16.7% or 130,800 tonnes on month to 915,400 tonnes, Mysteel's data showed.
Anticipating the rise in production, construction steel inventories at Chinese steelmakers and traders are expected to accumulate from mid-to-late October. However, the report suggests that the pace of accumulation will be tempered by robust trading activities during the traditional peak season for steel consumption.
According to Mysteel's data, the combined inventories of rebar and wire rod held by 184 steelmakers and trading warehouses in 35 cities sampled by Mysteel had totalled 5.18 million tonnes by the end of September, marking a decrease of 27.8% or approximately 2 million tonnes from end-August.
Regarding consumption, spot sales of rebar, wire rod, and bar-in-coil among the 237 trading houses surveyed by Mysteel averaged 122,641 tonnes/day in September, up 10.6% or 11,742 t/d from August.
The report underscored a notable increase in daily trading volumes toward late September, signalling a robust recovery in steel demand from end-users and buoyant market conditions.
Source:Mysteel Global
