Posted on 20 Sep 2023
Production of rebars across China increased by 1.9% on year over January-August to total 156 million tonnes, according to new data released by the country's National Bureau of Statistics (NBS). For August alone, rebar output came in at 18.8 million tonnes, 1.7% lower on year and down 6.8% on month.
The on-month decline in rebar output largely reflected the fact that many Chinese steel mills reduced production from July as their profit margins on rebar sales were hit badly by softening domestic steel prices and high production costs, sources said.
Mysteel's survey on rebar rolling capacity utilization among 137 Chinese steelmakers it regularly monitors was on par with the NBS result, as the run rate had slid 3.37 percentage points on month to 56.72% by the end of August.
Last month, the margins on selling rebar earned by the 91 blast-furnace mills nationwide that Mysteel tracks turned negative, as their average loss reached Yuan 55/tonne ($7.5/t) during August, against an average profit of Yuan 89/t for July. The weakness of finished steel prices and high steelmaking raw materials prices were blamed.
As of August 31, China's national HRB400E 20mm rebar price had slumped by Yuan 110/t on month to Yuan 3,776/t including the 13% VAT. For iron ore prices, Mysteel SEADEX 62% Australian Fines, for example, reached $117.95/dmt CFR Qingdao as of the same day, higher by $7.6/dmt on month.
On the other hand, domestic demand for long steel remained lackluster during August – a non-peak month for steel consumption – as sweltering temperatures and frequent rains dampened spot steel trading.
Mysteel's survey among the 237 steel trading houses it checks across China showed that their trading volume of construction steel comprising rebar, wire rod and bar-in-coil averaged 144,701 tonnes/day in August, down 5,271 t/d or 3.5% from that for the prior month.
Over the first eight months of this year, the country's fixed asset investment grew 3.2% on year to Yuan 32.7 trillion, among which the funding in the property market dropped 8.8% on year to Yuan 7.7 trillion.
In August, China produced 116.5 million tonnes of finished steel products, up 11.4% on year and taking the accumulative total for January-August higher by 6.3% on year at 909.2 million tonnes, according to NBS.
Source:Mysteel Global
