WEEKLY: China’s rebar output dips to nearly 3-year low
Over January 30-February 5, the average rolling capacity utilization rate among the surveyed rebar makers fell another 4.1 percentage points on week to 61.7%, or a new low since February 28 2018, and the operational rates among the sampled mills dived another 3.7 percentage points on week to 54.1%, according to the survey.
China’s steel mills especially for mini mills tend to slow the pace of production during the Chinese New Year (CNY) holiday by conducting maintenance on their facilities amid the quiet market, and integrated mills usually reduce finished steel output than idling their blast furnaces as it is rather costly to re-fire the furnaces because of their big sizes nowadays, Mysteel Global notes.
Other than the CNY holiday factor, however, the sudden outbreak of the NCP nationwide in late February, however, has further delayed not only the revival of the domestic steel market demand but also steel mills’ production, as many employees are not able to return to the offices, steel works, or construction sites, as of February 10, despite that many local authorities in China had originally set the date for business resumption.
Many enterprises, however, have either asked some employees to work from home or delayed the office return date further out of the safety and health concerns as concentrated travel via public transportation may trigger mass spread of the virus.
At the same time, over 20 Chinese cities, big and small, have been in various degrees of lockdowns, making it difficult for the citizens over there to travel back to their offices in the other cities, Mysteel Global understood.
The rebar rolling capacity utilization rate among the integrated mills of the 137 samples declined 5.2 percentage points on week to 76.2%, and their rolling mill operational rate slid 5 percentage points on week to 73.9%, while those re-rollers or mini mills, however, have almost come to a halt with their operational rate recorded as 4.6%, or down another 2.3 percentage points over the survey period, according to Mysteel’s survey.
Despite lower production, the tepid demand from China’s domestic market saw rebar inventories at the 137 sampled mills surged 19% from February 3 to 5.1 million tonnes as of February 6, according to the survey.
China’s national average benchmark price for HRB 400 20mm dia rebar price, amid the sluggish fundamentals, fell Yuan 39/tonne ($5.6/t) from January 23 to Yuan 3,795/t including 13% VAT as of February 5, or a new low since September 3 last year, according to Mysteel’s daily price tracker.
China’s long steel demand may stay dismal as more construction sites have further pushed back their resumption dates to until after mid-February or early March, Msyteel Global understood from the market.
Written by Venus Wang, wangyi@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
Table 1: Mysteel Rebar Production Survey by Region on February 5 (Unit: ’000 tonnes)
Table 2: Mysteel Wire Rod Production Survey by Region on February 5 (Unit: ‘000 tonnes)
Table 3: Mysteel Rebar Production Survey by Process on February 5 (Unit: ‘000 tonnes)
Table 4: Mysteel Wire Rod Production Survey by Process on February 5 (Unit: ‘000 tonnes)
Table 5: Mysteel Rebar and Wire Rod Stocks Survey by Region on February 5 (Unit: ‘000 tonnes)
Table 6: Mysteel Rebar and Wire Rod Stocks Survey by Process on February 5 (Unit: ‘000 tonnes)
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