Posted on 07 Dec 2022
China's prices of construction steel with rebar being a core product are likely to continue rebounding in the early part of this month amid an improved macroeconomic environment, but may fluctuate downward within a narrow range later due to weak fundamentals, Mysteel predicts in its latest monthly report. The report also noted the country's average rebar price may rise by Yuan 100/tonne ($14.3/t) on month in December.
As of December 5, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had increased by Yuan 21/t from the end of November to reach Yuan 3,967/t including the 13% VAT.
In December, China's rebar prices will be underpinned by the uptrend of raw materials, as there is a high probability of iron ore prices moving up this month due to domestic steel mills' restocking needs ahead of the Chinese New Year holiday (over January 21-27).
For example, Mysteel SEADEX 62% Australian Fines gained by $8.25/dmt from that on November 30 to $109.6/dmt CFR Qingdao as of December 5, according to Mysteel's assessment.
Chinese mills' rebar production is expected to keep declining in December as both blast-furnace and electric-arc-furnace mills have no intention to ramp up output given their relatively high costs in producing hot metal and crude steel, according to the report.
Over November 24-30, rebar production among 137 Chinese steelmakers surveyed by Mysteel came in at a three-month low of 2.84 million tonnes, or lower by 144,100 tonnes from the same period in the previous month.
On the other hand, the report warned Chinese steel mills may face more pressure from high stocks of rebar as most traders are less willing to build up steel inventories this winter amid the slack season for rebar consumption.
The extent to which rebar stocks pile up may be offset somewhat by falling rebar production in December, the report said. Rebar stocks held by the 184 domestic steel mills and at trading warehouses in 35 cities under Mysteel's tracking totalled 5.4 million tonnes as of December 1, the data showed.
Source:Mysteel Global
