Posted on 06 Nov 2024
Chinese prices of construction steel including rebar and wire rod will likely fluctuate in November amid a tug-of-war between positive expectations about the macroeconomy and weak steel-market fundamentals, Mysteel predicts in its latest monthly report.
The supply-demand pressure for domestic construction steel products may increase overall this month, with high output clashing against moderate-to-low demand, the report suggests. However, construction steel prices may see a rebound at some point during the month, driven by news about macroeconomic policies, it notes.
In October, domestic prices of construction steel items had retreated from high levels, against the backdrop of rising production and softening demand, causing market sentiment to become cautious, according to the report.
For example, as of October 31 China's national price of HRB400E 20mm dia rebar, a bellwether of the domestic steel market sentiment, had lost Yuan 313/tonne ($44.1/t) from the end-September to Yuan 3,631/t and including the 13% VAT, Mysteel's assessment showed.
Last month, China's construction steel output increased, fuelled by improved profitability among steelmakers. By end-October, weekly rebar output among the 137 mills Mysteel tracks nationwide reached 2.43 million tonnes, higher by 180,800 tonnes/week on month. In parallel, output of wire rod among the 92 mills Mysteel monitors grew by 29,900 tonnes during the same period to average 939,500 tonnes, Mysteel's data indicated.
On the other hand, rising output saw construction steel inventories at mills mount last month. As of October 31, the stocks of rebar and wire rod at the 139 steelmakers under Mysteel's tracking had swollen by 174,500 tonnes and 59,700 tonnes respectively on month to 1.55 million tonnes and 591,200 tonnes.
Conversely, the tonnage held by traders declined further though the pace had slowed, the report said. Trader and distributor stocks of rebar and wire rod in 35 cities Mysteel canvasses had settled at 2.83 million tonnes and 458,100 tonnes by end-October, lower by 332,700 tonnes and 136,000 tonnes.
In addition, spot trading activity in the domestic steel market had quietened moderately during October compared with the previous month, according to the report. The spot trading volume of rebar, wire rod, and bar-in-coil among the 237 trading houses sampled by Mysteel averaged 121,307 tonnes/day in October, slipping by 1.1% from September.
The report pointed out that the seasonal lull in demand had gradually emerged in Northwest and Northeast China, and that work on local construction sites may slow further this month.
Source:Mysteel Global
