Scheduled rebar production up 2.11% in March as coronavirus impact waned

SHANGHAI, Mar 12 (SMM) – Planned output of construction material rebar across China’s major blast furnace steelmakers in March rebounded 2.11% from the actual production in February, as the impact from coronavirus faded with downstream demand in steady recovery, the latest SMM survey showed. 

The amount of rebar output for domestic trades increased 1.65% on the month in March. 

Scheduled production of wire rods in March, meanwhile, shrank 40,000 mt from the realised output last month. 

As of March 11, end-users’ demand has recovered to 30-40% of the level same period last year. Eased pressure of inventories and cash flows prompted some steel plants to resume from maintenance. Electric arc furnace (EAF) steelmakers also moved up a gear, as the average operating rate climbed to 7.58% as of March 3 and may likely recover to 30% in the second half of March. 

It is noteworthy that planned production of rebar for exports this month jumped 13.8% from the realised exports in February, to 338,000 mt, as major steelmakers will step up shipments to overseas, a move to ease domestic supply pressure given an absence of full resumption of demand. The export destinations are mostly South-east Asian countries where the pandemic impact is less severe and infrastructure projects are concentrated. 

SMM expects markets of east, south and south-west China to face greater supply pressure in the near term, which will dampen the upward momentum in local rebar prices. But the downside room in prices will also be capped as consumption continues to recover.