Posted on 24 Dec 2020
Over the January-November period this year, China’s production of rebars increased by 4.9% on year to 242.7 million tonnes, according to new data from China’s National Bureau of Statistics (NBS). The pace of growth had quickened slightly compared with the 4.7% on-year rise over January-October, mainly due to higher production from vigorous electric arc furnace-based steel mills, Mysteel Global notes.
In November alone, China produced 23.3 million tonnes of rebar for an increase of 2.8% on year. The one-day difference between November and October resulted in the total being down 2.1% on month, the statistics showed. The daily production, however, rose by 1.1% on month to average 775,700 tonnes/day last month, Mysteel Global calculated based on the NBS data.
“The production from EAF-based mills has been picking up since mid-November given the recovery in profits the mills are enjoying,” a Shanghai-based market source said, adding that the margin on rebars could reach some Yuan 300/tonne ($45.8/t) for now.
The capacity utilization rate among the 71 EAF steelmakers Mysteel tracks moved up 1.58 percentage points on month to 59.48% as of November 26, with the figure increasing further to 60.91% as of December 17, Mysteel’s data showed.
But another Shanghai-based analyst countered that the rises in EAF mill output were partially offset by the production declines from integrated steelmakers. “Some mills try to maximize their returns on the volume of molten metal they produce by making flat steel – where the profits are currently higher than on long steel – but the influence is marginal. Thus, the space for rebar production to decline is still limited,” the analyst maintained.
Rebar output accounted for about 19.8% of the country’s total finished steel output last month, lower from the 20.1% ratio in October, according to the data.
For November, the profit margin on rebar won by the 91 blast furnace-mills sampled by Mysteel averaged Yuan 147/t, lower than the average of Yuan 250/t that mills enjoyed by making HRC, as reported.
As of November 30, China’s price of HRB 400 20mm dia rebar had grown to Yuan 4,099/t including 13% VAT, being up Yuan 239/t on month, Mysteel’s data showed.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Source:Mysteel Global
