China's rebar production witnessed a mild retreat this week, with the combined output of the 137 Chinese steel mills Mysteel regularly checks declining by 1.9% or 54,800 tonnes on week to 2.13 million tonnes over June 18-24, according to Mysteel's latest survey results.
Dull demand has weighed on the overall market confidence and rebar prices, compressing steelmakers' profitability from selling this long steel item amid firm raw material costs and therefore dampening their production enthusiasm this week.
China's national price of HRB400E 20mm dia rebar came in at Yuan 3,317/tonne ($488/t) as of June 25, down by Yuan 44/t on week, according to Mysteel's assessment.
Mysteel Global noted that some steelmakers proactively halted operations at blast furnaces and rolling mills for maintenance to alleviate inventory pressure amid sluggish sales, which mainly led to the overall production decline.
As such, the rebar rolling capacity utilization rate among the sampled mills averaged 46.8% during the same period, down by 1.2 percentage points on week, another Mysteel survey showed.
By province, steel mills in Southeast China's Jiangxi and Southwest China's Sichuan provinces contributed the most to the production drop, Mysteel's survey revealed.
Despite the declining output, sluggish spot transactions have intensified inventory pressure on both steel mills and traders after a persistent destocking trend for 14 consecutive weeks, latest Mysteel survey results showed.
The combined daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses nationwide under Mysteel's tracking averaged 88,458 tonnes/day over June 19-25, contracting by 3.9% or 3,610 t/d on week.
Rebar stocks held in 137 sampled steelmakers and commercial warehouses in 35 Chinese cities under Mysteel's tracking increased by 6.1% and 2.8% respectively on week to reach 1.96 million tonnes and 4.87 million tonnes as of June 25.
Source:Mysteel Global
