SHANGHAI, Mar 15 (SMM) – Planned output of construction steel rebar across China's major blast furnace steelmakers is estimated to rise 2.45% from the achieved production in February to 8.19 million mt in March, showed an SMM survey. Scheduled production of wire rods is likely to decrease 1.81% from the actual output in February to stand at 2.84 million mt in March. The increase in output was due to the fact that the number of days in March was three days longer than that in February. In addition, the end-user demand after the holiday and the recovery of profitability led to increased willingness of steel mills to produce.
Planned rebar output across China's major blast furnace steelmakers
Since the holiday, under the support of inflation, strong demand and strong support from the cost side, steel prices experienced a round of rapid rise. Even if the prices fell slightly recently, the cumulative increase reached 335 yuan/mt (based on the national average prices of spot rebar), the profitability of steel mills turned from negative to positive, and most steel mills reported that the gross profit of rebar production reached more than 200 yuan/mt.
The supply of rebar was still increasing slowly-driven by high profitability, in addition to steel plants with blast furnaces, the operating rates of electric furnace plants also rose to the highest level since July 2020. However, considering that the demand side is also recovering rapidly and production restrictions for environmental protection in Tangshan, Shandong and other places are still tightening, the actual supply increment is shrinking marginally, and the overall support of spot prices is still strong and likely to fluctuate robustly in the following weeks.
