China’s rebar output had been declining throughout January, with the weekly production volume falling to around 3 MnT for the last week of month among the country’s 137 steel producers including integrated and mini mills under Mysteel’s weekly survey, according to the latest released on February 3.
The weekly production volume was down substantially from the 3.51 MnT for the first week of January, or down 504,900 MT within the month, according to Mysteel’s database, though it was more or less the same as the 2.98 MnT a year ago when China was just a few days away from the Chinese New Year (CNY) holiday for 2019.
The production volume was also down 71,700 MT from the weekly output before China went on the 2020 CNY holiday on January 24.
The recent weeks of declines were mainly attributed to more maintenance of blast furnaces with the latest round in the regions such as Henan in Central China, Shandong in East China, and Guangxi is Southwest China, and some mini mills had cut down or suspended production on the shortage of billet, according to the latest survey.
Over the period, rebar stocks at the 137 mills continued to mount up to 4.31 MnT, up 2.15 MnT from the start of the month or 1.67 MnT higher than that from before the CNY holiday, with the added tonnage mainly reflected at the mils in Jiangsu and Shandong in East China and Shanxi in North China, according to Mysteel’s latest market survey.
The outbreak of the Novel Coronavirus (2019-nCoV) since late January, together with the CNY holiday, has seriously affected China’s domestic logistics and transportation services, making it difficult for steel mills to deliver steel products to the traders’ assigned warehouses, which had contributed to the rises in the mills’ steel inventories in general, Mysteel explained in the release.
In the coming few weeks, Chinese steel mills may still be under the pressure, as most of the construction sites in China have been requested to delay the resumptions of operations because of the virus outbreak at least until February 10, though their steel output may also be affected because of hiccups in transporting raw materials such as iron ore, coking coal or coke from Chinese ports or domestic suppliers, Mysteel predicted.
For the last week of January, the 184 mills under Mysteel’s regular survey produced a total of 9.72 million tonnes of five major finished steel including rebar, wire rod, hot-rolled coil, cold-rolled coil, and medium plate, down 194,400 tonnes in total from that before the CNY holiday, or down 544,700 tonnes from the beginning of the month.
As for stocks of the five finished steel products at these plants, the volume grew 2.95 MnT from that before the CNY holiday or up 3.75 MnT from the beginning of the year to nearly 8.3 MnT.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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