SHANGHAI, Sep 3 (SMM) – The rebar output increased by 2.2% week on week as some steel mills resumed production after maintenance, and apparent demand of rebar increased by 0.03% from the previous week.
Inventories of rebar across Chinese steelmakers and social warehouses stood at 11.17 million mt as of September 2, down 75,100 mt or 0.7% from a week earlier, according to SMM data. Stocks are down 402,900 mt or 3.5% from a year earlier.
Rebar output increased more significantly this week, while steel mills kept stable deliveries, leading to higher in-plant inventories. The stocks increased more significantly in the steel mills in north China, and the stocks in eastern mills declined amid higher demand.
Inventories at Chinese steelmakers increased 40,700 mt or 1.2% from a week earlier. And stocks are 24,500 mt or 0.7% lower than the same period last year.
Steel prices fluctuated widely this week, and the overall end demand recovered. The social inventories dropped most sharply in east China, ad the end demand rebounded intensively after the pandemic was controlled, and the local speculative transactions were active, with more downstream purchase at lower prices. The social inventories also declined slightly in north-west, south-west, and north-west China.
Inventories at social warehouses declined 115,800 mt or 1.48% on the week and stood at 7.71 million mt, 378,400 mt or 4.7% lower than a year ago.
Rebar inventories continued to rise this week and weighed on the supply side. The apparent demand remained flat in early September. The average apparent demand in August was estimated to drop 13% from the same period last year. In the short term, demand is still recovering in margins slowly, and inventories will continue to decline slowly. In the medium and long term, domestic production restrictions are strict, and output increments will be limited. After demand picks up, inventories will drop rapidly.
