Scheduled rebar production rises 0.7% in Dec amid high margins 

SHANGHAI, Dec 11 (SMM) – Planned production of construction material rebar increased for the second straight month in December as steelmakers in north China stepped up production to chase high profits. 

A SMM survey showed that rebar scheduled output in December across 31 major producers of long steel in China is expected to climb 0.7% from the actual output in November and stand at 8.32 million mt.

Output for domestic sales is planned at 8.15 million mt this month, up 0.72% from November, while scheduled exports are mostly flat on the month at lows of 170,000 mt due to weak export prices. 

Production enthusiasm across most steel mills remained high after the shortage of some specifications lifted rebar prices and improved profit margins in the second half of November. Some steelmakers raised the output of rebar at the expense of other steel products, as rebar remain the most profitable in the market.

SMM estimates a 5.7% increase in scheduled rebar production in December across steel plants in north China, compared to the actual output a month ago, as local environmental protection measures were less stringent than expected. 

In eastern China’s regions, year-end maintenance offset ramped-up production at some mills, and created a slight decline in local planned production for rebar on the month. 

Steelmakers in south-central China planned to maintain stable operation this month, but the region will face greater supply pressure with the influx of resources from the northern regions due to relatively higher prices in the south.

Separately, SMM survey showed that the scheduled output of wire rods across surveyed mills in China rose 1.9% from the realised output in November, to 2.99 million mt in December.

Production of wire rods for domestic sales is planned at 2.84 million mt this month, up 2% from November, with the volume for export flat on the month at 145,000 mt.