China's rebar output ends 15-week inclines

Persistent rebar price declines in China's domestic market June 9 had finally cooled down the production frenzy among China's 137 mills, with their rebar output having reversed from a 15-week climb-up, down to 3.96 mn t over June 11-17 and more lines had been on maintenance, Mysteel's weekly survey showed.

The latest weekly output was 0.6% lower from the record high of close to 4 million t in the prior week, and the rebar rolling capacity utilization rate among the 137 sampled mills retreated too from the five-year high, down 0.51 percentage point on week to 86.86% by June 17, according to the survey.

"Some more steel mills commenced the routine maintenance on their rebar rolling mills last week," a market source in Shanghai explained, clarifying that steel mills were still with margins despite the recent rebar price declines.

The latest weekly rebar output was indeed still 4.36% higher on year, indicating that many of the Chinese rebar producers had yet been willing to trim their production on the remaining profits

China's national price of HRB 400 20mm dia rebar had been on a downside since June 9, and as of June 17, it was assessed at Yuan 3,799/t ($536/t) including the 13% VAT, down Yuan 39/t on week, or still Yuan 187/t lower on year, according to Mysteel's assessments.

In contrast, rebar demand from construction sites had been declining because of the frequent rainfalls firstly in South and then in East China as well as the rising temperatures in North China in summer, Mysteel Global notes.

Over June 11-17, daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 traders fell another 5.2% on week to 202,140 t/day, according to Mysteel's data.

The changes in the fundamentals saw rebar stocks at the 137 sampled mills growing for the second week over June 11-17 to 3 mn t, up 5.8% on week against the mere 0.05% on-week gain in the previous week, according to Mysteel's data.

Table 1: Mysteel Rebar Production Survey by Region on June 17 (Unit: '000 tonnes)

Table 2: Mysteel Wire Rod Production Survey by Region on June 17 (Unit: '000 tonnes)

Table 3: Mysteel Rebar Production Survey by Process on June 17 (Unit: '000 tonnes)

Table 4: Mysteel Wire Rod Production Survey by Process on June 17 (Unit: '000 tonnes)

Table 5: Mysteel Rebar and Wire Rod Stocks Survey by Region on June 17 (Unit: '000 tonnes)

Table 6: Mysteel Rebar and Wire Rod Stocks Survey by Process on June 17 (Unit: '000 tonnes)

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