China's construction steel demand expected to recover further in Apr'24

China's construction steel demand is expected to recover further in April, driven by the accelerated work resumption at construction sites and the start of new projects, though the pace of growth may still lag behind the levels seen during the same period last year, according to Mysteel's latest survey released on Wednesday.

Domestic consumption of construction steel for this month will witness a growth of about 25% compared with that for March, Mysteel predicts based on end-users' actual procurement volume of construction steel last month and their purchase plan for April.

Mysteel's survey of construction enterprises nationwide shows that their actual steel procurement in March added up to 5.5 million tonnes, marking an on-month increase of 45.4%, and their planned steel purchase volume for April is 6.38 million tonnes.

In fact, the construction steel consumption across China in March failed to meet market expectations, with the weekly domestic apparent consumption of rebar logging only 2.3 million tonnes on average, much lower than the weekly average of 3.34 million tonnes for the same period last year, Mysteel's survey findings showed.

This month, the country's new starts of construction projects may improve continuously with the pleasant weather and the easing financial pressure in the sector, underpinning the recovery in construction steel demand.

Transactions of construction steel in the country's physical market have shown an increase so far this month. For the first 10 days of April, the daily trading volume of rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's regular tracking averaged 158,979 tonnes/day, a significant rise compared with the average of 121,795 t/d for March.

China's domestic steel prices have also seen some signs of recovery entering April, with the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment under Mysteel's assessment reaching Yuan 3,666/tonne ($507/t) including the 13% VAT as of April 10, gaining by Yuan 52/t from the end of March.

However, Chinese building contractors are still cautious about the market in the coming term, and most of them prefer to purchase steel products to fulfil their immediate needs rather than building up stocks, indicating that construction steel consumption is unlikely to reach the same level as the same period last year in near term, according to the survey.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.