Production of rebar across China over January-March surged by 18.9% on-year to 63.36 million tonnes, slightly lower than the 19% on-year leap for this year’s first two months, the latest data released by the country’s National Bureau of Statistics (NBS) show. Domestic steel demand enjoyed a steady recovery during this year’s Q1, while output data for the first quarter of 2020 is skewed by the heavy impact the coronavirus epidemic was having on steel mills’ operations at that time.
Last month, the on-year growth in rebar output was even more pronounced at 20.1%, with the total reaching 22.96 million tonnes, according to the NBS data. In March too, rebar safeguarded its top position among all major finished steel products, with bar accounting for 19.2% of total production of 119.87 million tonnes.
The Q1 and March results both met market expectations, sources say, noting that the Chinese economy was accelerating at a fast pace in the first three months of 2021. Even allowing for the lower base in Q1 last year, China’s gross domestic product grew significantly by 18.3% on year over this year’s January-March period to Yuan 24.9 trillion ($3.8 trillion), as reported.
Last month, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses under Mysteel’s survey averaged 205,358 tonnes/day. This was higher by 21.3% on year and almost double the growth recorded during January-February, showing that domestic steel demand remained firm with the approach of spring, traditionally a robust season for steel consumption in China.
Mysteel’s survey among the 91 blast-furnace steel mills it monitors regularly showed that their rebar margins for March increased by Yuan 353/tonne on month to Yuan 466/t on average as rebar prices remained high. But the margins also suffered pressure from strengthening raw materials prices during the period, survey respondents noted.
China’s national HRB400E 20mm rebar price, an indicator of the domestic steel market development, averaged Yuan 4,762/t including the 13% VAT for March, jumping by Yuan 279/t on month or skyrocketing by Yuan 1,134/t on year, according to Mysteel’s assessment.
But at the same time, iron ore prices began heading towards multi-year highs. Mysteel SEADEX 62% Australian Fines, for example, averaged $166.57/dmt CFR Qingdao as during March, up $1.9/dmt on month and spiking by a huge $78.7/dmt on year.
Written by Rong Zhang, zhangronga@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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