Weekly rebar output among China’s 137 steelmakers hit the highest in record since Mysteel commented the survey in February 2015, totalling 3.99 million tonnes over June 4-10, or up for the 15 straight week by another 0.8% on week, though domestic steel demand has shown signs of receding since the second week of May on the more frequent and heavy rainfalls especially in South China.
For the 137 sampled mills, their rebar rolling capacity utilization rate also hit its new five-year high of 87.4% over June 4-10, or up another 0.7 percentage point on week, and their average operational rate of the rolling lines moved up 2 percentage points on week to 78.4%, according to Mysteel’s study.
“It is unlikely for the Chinese steelmakers to voluntarily cut their output, not when they are still getting profits,”said a Shanghai-based market source, adding that the “demand is virtually falling may curb their unbridled production increases”.
Despite recent strengthening in raw material costs, “at this point, the profit is still above Yuan 100/tonne ($14.3/t),”he estimated, which is far lower than the average rebar margin at Yuan 255/t for May among the 91 domestic blast-furnace mills under Mysteel’s survey, but it seems satisfying enough for Chinese steel mill to keep high finished steel output.
More rainfalls across China with South China in particular recently have been eroding the country’s steel consumption, and rebar, as a core steel product for the construction sites, will unavoidably feel the negative impact as outdoor construction will be slowed down by the wet season, Mysteel Global understands.
The rain is moving northward to East China too, and Shanghai, for example, is forecast to have intermittent rainfalls over June 15-19.
Spot trading of rebar, wire rod and bar-in-coil among 237 traders Mysteel monitors regularly reversed down 15.7% on week to 181,491 tonnes/day, and rebar stocks at the traders in 35 major cities declined at a slower pace of 2% on week to 7.6 million tonnes as of June 11, as against the 3.6% on week contraction in the prior week, according to Mysteel’s survey.
Rebar stocks at the 137 sampled mills reversed from 13 weeks of contraction, though up merely 0.05% on week to 2.8 million tonnes, Mysteel’s data showed, and China’s average price of the HRB 400 20mm dia rebar reversed down by Yuan 18/tonne ($2.6/t) on week to Yuan 3,838/t as of June 10 including the VAT, or Yuan 223/t lower on year, according to Mysteel’s assessment.
Table 1: Mysteel Rebar Production Survey by Region on June 10 (Unit: ‘000 tonnes)
Table 2: Mysteel Wire Rod Production Survey by Region on June 10 (Unit: ‘000 tonnes)
Table 3: Mysteel Rebar Production Survey by Process on June 10 (Unit: ‘000 tonnes)
Table 4: Mysteel Wire Rod Production Survey by Process on June 10 (Unit: ‘000 tonnes)
Table 5: Mysteel Rebar and Wire Rod Stocks Survey by Region on June 10 (Unit: ‘000 tonnes)
Table 6: Mysteel Rebar and Wire Rod Stocks Survey by Process on June 10 (Unit: ‘000 tonnes)
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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