Rebar production among the 137 Chinese steel mills that Mysteel regularly checks climbed for the fourth consecutive week over January 1-7, rising by 1.5% or 28,200 tonnes on week to 1.91 million tonnes, according to Mysteel's weekly survey.
Findings from another Mysteel survey confirmed the production gain. The rebar rolling capacity utilization rate among the sampled mills averaged 41.9% during the same period, up by 0.6 percentage points on week, while the average operational rate nudged up by 0.3 percentage points to 39%.
Relatively low inventory pressure led some mills to step up production after finishing maintenance on their steelmaking facilities, according to market sources, resulting in the tiny but steady production increase. By province, steel mills in Central China's Hubei, East China's Anhui and Southeast China's Jiangxi contributed the most to the rebar output gain, Mysteel's survey results showed.
However, the pickup in output occurred as demand from building contractors and other rebar users declined, with the result that retail stocks of the bars recorded their first on-week rise since mid-October, Mysteel Global noted. Stocks held by traders in commercial warehouses in the 35 cities Mysteel regularly covers had mounted by 2.6% or 75,200 tonnes on week to register 2.9 million tonnes as of January 8.
During the survey week, Mysteel assessed apparent demand for rebar at 1.75 million tonnes, dropping by a substantial 12.7% on week.
Meanwhile, derivative prices of major steelmaking raw materials such as coke and coking coal have posted sharp gains recently, which raised steel market sentiment from the cost side and significantly boosted rebar prices in both the spot and futures markets, Mysteel Global noted.
On January 8, the price of the most-traded rebar futures contract for next May delivery on the Shanghai Futures Exchange closed the daytime trading session at Yuan 3,168/tonne ($454/t), up by 1.31% or Yuan 41/t from the settlement price on December 31, the exchange's data indicated.
In the spot market on the same day, Mysteel assessed the national price of HRB400E 20mm dia rebar at Yuan 3,350/t, higher by a sizable Yuan 26/t from the level on December 31.
Source:Mysteel
