Most steelmakers in China continued to maintain full operations and the impact of maintenance on output will further reduce from a month ago in June, driven by existing profits of rebar.

Output of cold-rolled steel (including galvanised steel) at Benxi Iron & Steel is expected to reduce 158,000 mt in May as the steelmaker plans to put a cold rolling mill into maintenance this month, sources told SMM. 

Planned output of construction steel rebar across China’s major blast furnace steelmakers in May rose 15.24% from the planned production in April to 9.16 million mt,  on the back of steelmakers return from maintenance and diverted capacity to rebar in the chase of higher profits, showed an SMM survey.

Chinese electric arc furnace (EAF) steelmakers operating rates continued to edge higher as of early May, driven by the resumption of producers in central China as the spread of the coronavirus has stalled. However, the rally in operations will be constrained due to a surge in feedstock steel scrap prices. 

Inventories of steel rebar across Chinese steelmakers and social warehouses slowed their year-on-year buildup as of April 16, the first time since the Chinese Year holiday, a sign that a high demand season may have arrived with the rise in consumption surpassing the supply increase.

Nearly 20 major steelmakers in China have raised their quotes for spot construction steel sales following a substantial rally in futures that began in early April. The increases in quotes, varying from 10 to 50 yuan/mt, did not mute trades, SMM research found.

Inventories of steel rebar across Chinese steelmakers and social warehouses fell for the fourth consecutive week as of April 9 with the steady recovery of demand as construction work has normalised. Compared with the same period a year earlier, however, the stocks continued their buildup, which remains the headwinds facing spot prices of rebar. 

Chinese silicon plants may face difficulties to resume production as scheduled in the wet season starting from June as the global widespread COVID-19 has disrupted the supply chain and led to a shortage of raw material wood charcoal. SMM learned that most silicon plants have conducted maintenance and tried to secure feedstock for the preparation of resumption.

A copper smelter in south-west China has put its facilities into month-long maintenance as scheduled, sources told SMM. 

Social inventories of stainless steel in China showed signed of declines at end-March, after the stocks hit the highest level on record last month. However, downstream demand has yet to recover sufficiently to support a sustained slide in the inventories, which may threaten lingering inventory pressure in April that will keep stainless steel prices under pressure.