Posted on 07 Nov 2022
Chinese prices of construction steel including rebar and wire rod stand a chance of bottoming out and being rangebound at low levels during the early part of this month, according to Mysteel's latest monthly report. Later, an easing of the supply-demand imbalance could lead to a price rebound but the extent to which prices recover may be constrained by season factors, the report warned.
As of November 3, the country's national price of HRB400E 20mm dia rebar under Mysteel's assessment had inched up by Yuan 7/tonne ($0.97/t) from a two-year low of Yuan 3,883/t on October 31, to reach Yuan 3,890/t, all including the 13% VAT.
Production of construction steel will decline in November, given the deepening losses among Chinese steel mills, the report predicted. Mysteel's survey among 247 steelmakers nationwide showed that fewer than 10% of them were earning profits as of November 3, compared with over 50% this time last month and making for the lowest ratio since January 2016.
Over October 27-November 2, rebar production among the 137 steel producers Mysteel tracks declined by 26,200 tonnes on month to 2.99 million tonnes, and output of wire rod among the 92 makers Mysteel samples also fell by 89,200 tonnes to 1.27 million tonnes over the same period, the data found.
On the other hand, consumption of construction steel is expected to improve this month, underpinned by the faster pace of work on infrastructure projects as year-end approaches. "The overall demand in the steel market is not very poor at present," the report noted.
So far this month, Mysteel's data showed that the transaction volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 trading houses it surveys averaged 168,931 tonnes/day, or down marginally by 0.4% or 761 t/d from the same period last year.
Early on, some market insiders believed that inventories of construction steel would accumulate due to the continuing high rate of deliveries from mills, the report pointed out. "But in the current situation, the build-up in stocks may be postponed as their production has gradually decreased," it said.
As of November 3, rebar stocks held by the 184 domestic steel mills and at trading warehouses in 35 cities Mysteel monitors totalled 5.9 million tonnes, and those of wire rod reached 1.5 million tonnes, both registering a four-week decline, the data showed.
Source:Mysteel Global
