Posted on 14 Jun 2022
Daily crude steel production among the 247 blast-furnace and 71 electric-arc-furnace steel mills across China regularly sampled in Mysteel's survey continued to increase over the first ten days of June, rising by another 27,200 tonnes/day from late May to 2.99 million t/d on average and marking the highest daily average since August 2021.
The continuous rise indicated that more Chinese steelmakers, especially BF steel mills, had resumed production in early June after completing maintenance works or had ramped up production to cash in or healthier profit margins. They were also expecting a recovery in demand with the lifting of the COVID-related lockdown in Shanghai from June 1.
Meanwhile, many steel mills were able to accelerate their pace of deliveries to the market thanks to the further improvement in logistics services. Steel inventories at mills' yards had also steadily declined, giving the makers some confidence to increase their output to some extent, Mysteel Global learned.
Over June 2-8, inventories of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills under Mysteel's regular survey had slipped for the fourth consecutive week to a 10-week low of 6.37 million tonnes, down by another 3.1% on week, as reported.
The result for early June was in line with Mysteel's other survey, which showed that capacity utilization among the 247 sampled BF mills had exceeded 90% again over June 3-9, rising for the seventh straight week to average 90.14%.
China's steel prices had recovered somewhat in early June, driven by the improved sentiment in the domestic market. As of June 10, the national price of HRB400E 20mm dia rebar under Mysteel's assessment had reached Yuan 4,821/tonne ($716/t) including the 13% VAT, up Yuan 35/t from the end of May.
However, steel transactions in the physical market were not as active as the market had expected, as demand in East China had not recovered to normal levels. In parallel, the torrential rains in southern China and the holding of the country's annual national college entrance exam also affected road transportation and outdoor construction. This also put some pressure on domestic steel prices, Mysteel Global noted.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 Chinese trading houses under Mysteel's tracking averaged 162,554 t/d over June 1-10, higher by only 8,371 t/d compared with the average for late May.
Source:Mysteel Global
