Scheduled rebar production 2.8% lower in February amid coronavirus risks

SHANGHAI, Feb 12 (SMM) – Planned production of construction material rebar continued to shrink in February as the coronavirus outbreak disrupted the shipments and purchases at steel mills, resulting in greater inventory pressure of finished products and a shortage of raw materials especially steel scrap. 

China’s rebar scheduled output in February is expected to fall 2.8% from the actual output in January, according to a SMM survey that covers steelmakers already returned from the Chinese New Year holiday. 

Lower profits of rebar compared with hot-rolled coil since the second half of December also accounted for the decline in rebar scheduled output for February. 

SMM expects rebar production to stay at low levels as more producers may carry on maintenance or scale back production on the back of bearish prospects for demand recovery before end-February. 

But the smaller supply will unlikely to prop up near-term prices of rebar as demand will remain sluggish. 

It is worth noting that some steel mills showed more willingness to supply to overseas consumers on weakness in domestic consumption, and this may add to downward risks for rebar export prices.