.gif)
Loading
Chinese domestic construction steel prices could stabilise and rebound this month, with both demand and supply growth. Demand growth could outpace supply growth, and construction steel inventories could decline further.
As for construction steel demand, the operating rate of construction projects will increase, as September is usually a peak season for steel consumption in China.
In addition, projects that have suffered interruptions due to flooding and the resurgence of COVID-19 cases are likely to see an acceleration of work this month, leading to significant growth in steel demand during the month.
China’s construction steel production will be subdued in September compared to August, as some steel mills resumed production in mid- to late August and their output subsequently increased.
Rebar production among China’s 137 steelmakers, including integrated mills and re-rollers, gained for the third consecutive week from August 19-25, rising 0.8% or 27,000 tonnes per week to reach 3.27 million tonnes.
In August, Chinese steel spot prices fell sharply at the beginning of the month as the market reacted to Beijing’s call for stable supplies and bulk commodity prices.
As of 27 August, construction steel stocks, including rebar and wire rod stocks at 137 steel mills, stood at nearly 4.2 million tonnes, up 166,600 tonnes from the previous month, although the volume was still 386,100 tonnes lower than a year earlier.
As for steel stocks in commercial warehouses in China’s 35 cities, the volume amounted to 9.5 million tonnes as of 27 August, down 329,400 tonnes on the month or 1.2 million tonnes on the year.
In August, steelmakers saw their production costs fall as iron ore prices fell and mill margins expanded moderately.
As of 31 August, average margins earned by Chinese blast furnace mills on their rebar reached 699 yuan/tonne, up from 297 yuan/tonne in July.
