China's rebar output rebounds on week

China's rebar production recovered slightly this week, with the combined output of the 137 Chinese steel mills Mysteel regularly checks edging up by 1.2% or 24,400 tonnes on week to 2.15 million tonnes over June 4-10, according to Mysteel's latest survey results.

Some steel mills adjusted their production plans to produce more reinforcing bars, while others ramped up rebar output to some extent, both of which accounted for most to the increase in rebar volume, Mysteel noted in its weekly report.

As such, the rebar rolling capacity utilization rate among the sampled mills averaged 47% during the same period, rising by 0.5 percentage points on week, while the average run rate also crept higher by 0.4 percentage points on week to 42%, another Mysteel survey showed.

By province, output of reinforcing bars posted the largest on-week gains among steel mills in East China's Jiangsu and in Southwest China's Sichuan provinces, Mysteel's survey revealed.

Sluggish seasonal demand has dampened the interest of end-users such as building contractors to replenish rebar stocks, largely ending the retail inventory drawdown of the long steel product.

Inventories of reinforcing bars held by traders in the commercial warehouses in 35 Chinese cities under Mysteel's tracking totaled 4.79 million tonnes as of June 11, only dipping by a minimal 0.09% or 4,500 tonnes on week.

Daily spot trading volume of rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel regularly monitors averaged 89,634 tonnes/day over June 5-11, down by 3.5% or 3,246 t/d on week.

In addition, the subdued demand – together with the increased output – led rebar stocks at mills to accumulate further, Mysteel Global noted.

The stocks of bars held by the sampled 137 steel mills mounted further and faster during the sample week, with the tonnage swelling by 4.4% or 77,200 tonnes on week to 1.82 million tonnes as of the same day, 2 percentage points faster than the pace of the rise recorded last week.

Dull end-user demand has also weighed on domestic rebar prices, with Mysteel assessing the national price of HRB400E 20mm dia rebar at Yuan 3,388/tonne ($501/t) on June 11, sliding by Yuan 24/t on week.

Source:Mysteel Global