Scheduled rebar production up 0.23% in April

SHANGHAI, Apr 13 (SMM) – Planned output of construction steel rebar across China's major blast furnace steelmakers is estimated to rise 0.13% from the achieved production in March to 8.13 million mt in April, showed an SMM survey. Scheduled production of wire rods is likely to decrease 0.23% from the actual output in March to stand at 2.78 million mt in April. Driven by high profits, steel mills have a strong willingness to produce. Scheduled rebar production in April increased slightly as some steel mills took maintenance, and the output of wire rods continued to decline. Under the continuous disturbance of production restrictions for environmental protection, production may have reached the peak of the year.

Planned rebar output across China's major blast furnace steelmaker

Under the dual influence of production restrictions for environmental protection and the release of domestic demand, supply and demand maintained a tight balance pattern in March, and rebar prices soared. As of April 12, the national average prices of rebar stood at 4,975 yuan/mt, up 294 yuan/mt from the same period in March. Due to the strong finished products and weak raw materials, the average profitability of blast furnace steel mills' rebar came in at 680 yuan per tonne of steel.

Except for the resumption of production at a steel plant in Northwest China and the increase in SG production in East China, the other regions have experienced reductions in production. The supply of rebar in the country has reached a relatively high level now, and the output is more likely to fall. It is difficult for blast furnace plants to increase production due to production restrictions for environmental protection. Operating rates of electric furnace plants reached a historical high, so the overall output upward room was relatively narrow. Moreover, the sales data of automobiles and real estate in March were good, and the financial pressure of related enterprises eased. In addition, this year's infrastructure construction was strong, and the national tax and fee reduction enterprises reduced the cost, so the demand side is expected to be relatively good. Therefore, the fundamentals of rebar remained strong, supporting spot prices. However, disturbed by macro news, commodity prices may have recent policy adjustments, and there will be certain pressure on prices upward, and long steel prices will keep fluctuating in the near term.