China: Rebar output touches 1.5-month low

Rebar production among the 137 Chinese steel mills Mysteel samples regularly declined for the third week in a row over October 6-12 though at a faster pace, falling by 2.6% or 77,300 tonnes on week as against the prior week's mere 0.5% dip to refresh a 1.5-month low of 2.93 million tonnes, according to Mysteel's weekly survey.

Steel mills in North China's Shanxi and Hebei provinces and in Northeast China's Heilongjiang posted significant on-week falls in rebar output, the survey found, as integrated steelmakers in these regions commenced maintenance stoppages on their blast furnaces and reined in output. Mini-mills curtailed production as well in a bid to reduce their losses.

Over the survey period, both rebar rolling capacity utilization and the operational rate among the surveyed producers slid further, Mysteel's surveys showed. The former slipped by 1.7 percentage points on week to 64.3% while the latter inched down by 0.3 percentage point on week to 48.9%.

Chinese finished steel prices saw downward corrections last week, chiefly as market sentiment weakened with steel demand waning. As of October 14, the national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 4,137/tonne ($575/t) including the 13% VAT, or down Yuan 58/t from that on October 9, a make-up working day in China due to the country's October 1-7 National Day holiday.

The recent upsurge in new COVID-19 cases in many cities across China took its toll on steel demand among end-users, sources said. Over October 10-14, the daily trading volume of rebar, wire rod and bar-in-coil among the 237 steel trading houses under Mysteel's tracking averaged just 161,409 tonnes/day, well below the threshold of 200,000 t/d regarded as normal for this time of year.

On the other hand, rebar inventories at the 137 steel mills Mysteel checks reversed down by 5% or 108,000 tonnes on week to around 2 million tonnes as of October 12.
Meanwhile, the tonnage at commercial warehouses in the 35 Chinese cities Mysteel monitors also reversed down, thinning by 4.5% or 215,500 tonnes on week to settle at 4.6 million tonnes as of October 13.

Written by Rong Zhang, zhangronga@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.