Posted on 06 Jan 2025
Chinese prices of construction steel including rebar and wire rod are likely to fluctuate in a narrow range during January, as demand will gradually slip to a standstill with the Chinese New Year holiday falling later this month, and production will have more scope for a decline, Mysteel predicts in its latest monthly report. The long steel market may face some pressure as the drop in demand will likely be faster than that of output, the report also suggests.
Last December, domestic construction steel prices showed some resilience as output and inventories were both low, according to the report. For example, China's national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 3,495/tonne ($479/t) and including the 13% VAT on December 31, up Yuan 50/t from the end of November.
Construction steel output across China dropped last month in tandem with the fall in operational rates among mills, the report observed. By end-December, the weekly production of rebars among the 137 Chinese steelmakers Mysteel tracks reached 2.16 million tonnes, lower by 115,800 tonnes on month and by 355,400 tonnes on year, Mysteel's data indicated.
In parallel, the weekly output of wire rod among the 92 mills Mysteel monitors stood at 828,800 tonnes, falling by 71,000 tonnes on month and lower by 153,400 tonnes on year.
On the other hand, lower output saw construction steel inventories at mills and traders' warehouses decline last month. As of December 26, the combined inventories of rebar and wire rod held by the 137 steelmakers and trading warehouses in the 35 cities sampled by Mysteel had totalled 4.83 million tonnes, falling by 587,600 tonnes on month and 2.2 million tonnes on year.
Since mid-to-late December, the pace of decline in long steel inventories held by mills and traders had both slowed, the report pointed out. Affected by weakening demand, the market is likely to enter a seasonal inventory accumulation cycle this month, it suggested.
However, as long steel output is significantly lower currently than in previous years, any accumulation of tonnage this year seems unlikely to reach the high levels seen in the past, the report added.
It also mentioned that during December, spot trading had weakened in most parts of the country, with the daily trading volume of rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel follows nationwide averaging 110,677 tonnes/day, declining by 4.3% from a month earlier.
Source:Mysteel Global
