Posted on 07 Jun 2022
Rebar production among the 137 Chinese steel producers under Mysteel's tracking recovered over May 26-June 1 from two weeks of declines, rising by 1.2% or 36,400 tonnes on week to 2.98 million tonnes, Mysteel's weekly production survey found.
Survey respondents pointed out that long steel output had touched a low level after the significant reductions seen previously, which in turn provided the space for the production recovery. In addition, ferrous metals prices showed signs of a rebound in both the physical and futures markets, and the margins that steel mills earn on selling their products are expected to bounce back, both of which encouraged mills to lift their production.
During the survey week, the rebar rolling capacity utilization rate among the surveyed producers reversed up 0.8 percentage point on week to 65.2%, while the operational rate among the rolling mills dipped by 0.7 percentage point during the same period to 52.1%, according to Mysteel's related surveys.
China's domestic steel prices rallied last week as market sentiment improved with the country's firmer macroeconomy and the lifting of Shanghai's city-wide lockdown from June 1, sources remarked.
As of June 2, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had ended three weeks of declines, reversing up by Yuan 66/tonne ($9.9/t) from that on May 27 to reach Yuan 4,831/t including the 13% VAT.
Domestic steel demand picked up markedly as many end-users replenished their inventories ahead of the country's Dragon Boat Festival holiday over June 3-5, according to a market watcher, while speculative buying also increased due to the continuous strengthening of futures prices.
Over May 30-June 2, the daily trading volume of rebar, wire rod and bar-in-coil among the 237 Chinese steel trading houses Mysteel monitors regularly surged by 31,639 tonnes/day or 21.2% from the prior week to an average of 180,905 t/d.
Higher spot sales saw rebar stocks at both the surveyed mills and traders decrease, with the tonnage at those 137 steelmakers declining after five weeks of gains, thinning by 236,900 tonnes or 6.4% on week to 3.4 million tonnes as of June 1. In parallel, stocks at the commercial warehouses in 35 Chinese cities Mysteel follows declined for the fourth straight week, down 11,600 tonnes or 0.1% on week to 8.2 million tonnes by June 2.
Source:Mysteel Global
