China's HRC-rebar price spread turns positive again
As of December 28, China's spot price of Q235 4.75mm HRC was Yuan 36/tonne ($5.1/t) higher than the national price of HRB400E 20mm dia rebar, both under Mysteel's tracking. Previously, the price spread persistently remained negative during November 1-December 7.
The domestic consumption of HRC and rebar has performed divergently in December, Mysteel Global noted. The apparent use of HRC in China totaled about 13.1 million tonnes this month, being 1.5% higher than the total of the prior month, Mysteel's weekly monitoring showed.
On the contrary, the weekly apparent use of rebar decreased to a particularly low level of 2.2 million tonnes over the same survey period, down for the third straight week and by a larger 7.6% on week compared to the prior period's 5.5%, Mysteel's latest survey showed.
In fact, the current quarter is generally a robust season for China's manufactured goods including automobiles and white goods regarding their booming sales, and the sales are more stimulated in December as the year-end usually features a lot of promotional activities by those manufacturing firms, explained an analyst in Shanghai.
As a result, such fact firmly supported domestic consumption of HRC. Meanwhile, China's rebar demand experienced accelerated declines entering December when freezing and snowy weather significantly constrained works at outdoor construction sites in regions such as northern China, Mysteel Global notes.
Also, Chinese electric-arc-furnace steelmakers' production enthusiasm during the previous three weeks contributed to the worsening in the supply-demand balance of rebar this month, the source added.
In November, China's rebar prices were able to overtake HRC prices because the destocking in retail stocks of the former was faster than that of the latter, and spot prices of rebar also sourced strength from market optimism about Beijing's unveiling of new property stimulus, Mysteel Global observed.
Written by Lea Li, liye@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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