Chinese Steel Rebar Fell 121,000 mt on Week

SHANGHAI, Aug 20 (SMM) - The rebar output increased slightly by 1.12% week on week, and apparent demand of rebar rebounded significantly by 3.2% on the week.

Inventories of rebar across Chinese steelmakers and social warehouses stood at 11.36 million mt as of August 19, down 121,000 mt or 1.1% from a week ago. Stocks are up 54,100 mt or 0.5% from a year earlier.

Rebar output continued to rebound this week, while the increase in-plant inventories further narrowed, as the stocks were smoothly transferred to social warehouses. The stocks at northern steel mills fell more significantly, while the stocks at southern mills increased slightly.

Inventories at Chinese steel makers fell 6,300 mt or 0.2% on the week and stood at 3.51 million mt. Stocks are down 12,600 mt or 0.4% from a year earlier.

The decline in the rebar social inventories further expanded. The stock decline was stagnated in east China due to the heavy rains and pandemic, while the stocks in north, west, south and central China all decreased. End demand remained low, but rebounded slightly.

Inventories at social warehouses declined 114,700 mt or 1.44% on the week and stood at 7.85 million mt, but up 66,700 mt or 0.9% from a year ago.

The regional power curtailment was alleviated, and some steel mills increased production for higher profits, which led to the two-week continuous increase in the rebar output. However, the overall production cut policy is expected to be strict in the second half of the year, and the increment in the rebar output may be limited.

The off-season demand for rebar is much weaker than the previous years due to the rains and pandemic in the short term. Rebar stocks may continue to fluctuate slightly amid weak supply and demand.

In the medium and long term, the consumption is still expected to peak in September and October, and the demand for building materials is expected to pick up, which will lead to the decline in stocks.