Chinese rebar production down

In the first quarter of 2022, China produced a total of 55.29 million tons of rebar, down 13.3 percent year on year, according to new data from the country's National Bureau of Statistics (NBS). In March alone, China's rebar production fell 11.9 percent year on year to 20.4 million tons.

Many Chinese steelmakers producing construction steel, including rebar, gradually resumed production last month with the Paralympic Winter Games and the closing of the winter heating season, but their operational rates have recovered at a limited pace, mainly due to tightening profit margins, Mysteel Global noted.

For example, Mysteel's survey of 137 producers showed that the average operating rate of rebar rolling lines was 54.75 percent, down 14.1 percentage points year on year, up 1.31 percentage points month on month as of March 30.

In March, rebar sales margins from the 91 blast furnaces tracked by Mysteel turned negative, with average profits falling RMB 113/tonne ($17.6/t) month-on-month, at a loss of RMB 94/t due to higher steelmaking raw material prices. .

For example, Mysteel SEADEX 62% Australian Penalties In March, an average of $151/dmt CFR Qingdao, increased by $10/dmt monthly, and according to Mysteel's assessment, China's national composite metallurgical coke price averaged Yuan 3,427/t including VAT last month, Yuan 679. /ton increased. per month.

For Chinese steel prices in March, the national HRB400E 20 mm diameter rebar price was determined by Mysteel as an average of 4,973 Yuan/tonne including 13% VAT, which is a modest increase of 29 Yuan/tonne month on month.

Although March was generally a strong month for steel consumption, steel demand from China's end users has recovered more slowly than expected, mainly due to the impact of the COVID-19 outbreaks in many parts of China.

Among the 237 traders followed by Mysteel, daily rebar, wire rod and rod-in-bar trade volume was just 167,670 tons/day in March, well below 205,358 tons/day for the same period last year.

According to NBS data, in the January-March period, China's finished steel production amounted to 311.93 million tons, down 5.9% year on year, with volume for March alone falling 3.2 percent year on year to 116.89 million tons.