China's rebar output retreats on week

China's rebar production dropped slightly over July 23-29, with the combined volume produced by the 137 domestic steelmakers under Mysteel's coverage edging down by 0.6% or 11,300 tonnes on week to around 2 million tonnes, according to Mysteel's latest survey results.

During the survey week, integrated steel makers in Tangshan, China's top steelmaking hub in Hebei province, were required to slash operating capacity on blast furnaces and sintering machines by 20% to 40% from July 25 to 29, as Mysteel Global reported.

As such, the rebar rolling capacity utilization rate among the sampled mills averaged 43.9% during the same survey period, nudging down by a small 0.3 percentage points on week, another Mysteel survey indicated.

Steady delivery of rebar from steelmakers to market traders lifted rebar inventory levels over the week as weak end-user demand failed to absorb the cargoes, Mysteel Global noted.

The combined tonnage of rebar, wire rod and bar-in-coil traded among the 237 Chinese trading houses under Mysteel's survey averaged 81,318 tonnes/day over July 24-30, contracting by 4.7% or 3,993 t/d on week.

Rebar stocks held by the 137 steelmakers sampled by Mysteel totaled 1.85 million tonnes as of July 30, down by 3.5% or 67,300 tonnes on week, while those stored in commercial warehouses of the 35 Chinese cities Mysteel regularly tracks rose by 1.6% or 81,000 tonnes on week to 5.14 million tonnes as of the same day.

Dull end-user demand, downbeat market sentiment and weakening cost support worked together to weigh on rebar prices in both spot and futures market, Mysteel Global noted.

In the derivatives market on July 30, the most-traded rebar futures contract on the Shanghai Futures Exchange for October delivery closed the daytime trading session at Yuan 3,014/t, dropping by 2.5% on week from the settlement price of July 23, according to the bourse's data.

In the spot market, Mysteel assessed the national price of HRB400E 20mm dia rebar at Yuan 3,243/t on July 30, down by Yuan 41/t on week and marking the lowest level since mid-November last year.

Source:Mysteel Global