In the first quarter of 2022, China churned out 55.29 million tonnes of rebar in total, down 13.3% on year, according to the new data from the country’s National Bureau of Statistics (NBS). For March alone, China’s production of rebar fell by 11.9% on year to reach 20.4 million tonnes.
Many Chinese steel mills, which produce construction steel including rebar, had gradually resumed production last month with the close of the Winter Paralympic Games and the winter heating season, but their operational rates recovered at a limited pace, mainly due to squeezed profit margins, Mysteel Global noted.
For example, Mysteel’s survey among 137 mills showed that the average operational rate of their rebar rolling lines was at 54.75% as of March 30, up 1.31 percentage points on month but down a large 14.1 percentage points on year.
In March, the margins on selling rebar from 91 blast-furnace mills Mysteel tracks turned negative, as their average profit dropped by Yuan 113/tonne ($17.6/t) on month to a loss of Yuan 94/t amid surging steelmaking raw materials prices.
For instance, Mysteel SEADEX 62% Australian Fines averaged $151/dmt CFR Qingdao during March, up $10/dmt on month, and China’s national composite coke price under Mysteel’s assessment averaged Yuan 3,427/t including the VAT last month, up Yuan 679/t on month.
For Chinese steel prices in March, the national HRB400E 20mm dia rebar price was assessed by Mysteel at Yuan 4,973/t including the 13% VAT on average, up modestly by Yuan 29/t on month.
Although March is usually a robust month for steel consumption, China’s steel demand from end-users had picked up slower than expected, mainly due to the impact of COVID-19 outbreaks in many parts of China.
The daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 traders Mysteel follows, averaged just 167,670 tonnes/day in March, far below the 205,358 t/d for the same period of last year.
Over January-March, China’s finished steel output totalled 311.93 million tonnes, down 5.9% on year, and for March alone, the volume dipped by 3.2% on year to 116.89 million tonnes, according to the NBS data.
Written by Rong Zhang, zhangronga@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.
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