China's rebar output recovers after 3-week fall

Rebar production among the 137 Chinese steel mills Mysteel checks nationwide recovered during June 12-18 after declining for the previous three weeks, with the volume rising by 2.2% or 46,100 tonnes on week to reach 2.12 million tonnes. Total output was still 8% lower than during the corresponding period last year though, the results of the latest weekly survey showed.

Integrated mills were mostly responsible for the rise in output, as many had resumed operations on rolling facilities or allocated more hot metal to rebar production during the period, according to a survey respondent. In particular, steel mills in East China's Anhui, North China's Shanxi, Central China's Hubei and Northeast China's Liaoning recorded significant on-week rises in rebar output.

During the survey week, the rebar rolling capacity utilization rate among the surveyed mills picked up by 1 percentage point on week to 46.5%, while their operational rate remained unchanged on week at 42.3%, according to Mysteel's data.

The mills' healthy profit margins on rebar sales had encouraged the higher output, the respondent commented, noting that their production costs had eased amid the softening of raw materials prices.

Chinese spot steel prices had been mildly fluctuating, as reported. On June 19 for example, Mysteel assessed the country's national price of HRB400E 20mm dia rebar at Yuan 3,218/tonne ($448/t) and including the 13% VAT, lower by Yuan 13/t on week.

In tandem, the Mysteel SEADEX 62% Australian Fines index for imported iron ore had slid by $2.25/dmt on week to $92.1/dmt CFR Qingdao by Thursday.

As for demand, the spot trading volume of rebar, wire rod and bar-in-coil among the 237 trading houses across China that Mysteel monitors had slipped by 1.8% or 1,779 tonnes/day on week to average a mere 98,293 t/d over June 13-19, reflecting the seasonal lull in steel consumption from end-users.

In addition, rebar inventories at both the 137 steel mills and among traders in the 35 cities Mysteel monitors had decreased further last week, though the pace slowed.

The tonnage at the surveyed mills thinned by 0.3% or 5,700 tonnes on week to 1.82 million tonnes as of Thursday, as against the 19,700 tonnes fall a week earlier, while the volume at traders' warehouses dropped 1.7% or 64,400 tonnes on week to 3.69 million tonnes as of the same day, compared with the previous week's 104,300 tonnes drop.

Source:Mysteel Global