Given the impact of the sharp jump in fixed assets investment, demand for rebar and other construction steels has indicated a strong rising trend recently. In June, China's rebar production again hit a monthly historical high. Meanwhile, both the spot market and futures market for long products in China registered considerable increases in the past week against the background of brisk commercial activity.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Rebar | 20 mm | HRB 335 | 4,060 | 594 | +70 |
Rebar | 20 mm | HRB 400 | 4,150 | 608 | +80 |
Wire rod | 6.5 mm | Q235 | 4,010 | 587 | +50 |
China's domestic construction steel market maintained a rising trend on the whole over the past week. Market prices in northern and eastern China picked up remarkably, while the northeastern and northwestern markets showed relatively stable movement, with a minor decline recorded in the Chengdu market in the southwestern region. Markets in the other regions generally climbed up by margins ranging from RMB 50/mt to RMB 120/mt week on week.
Last week, Jiangsu Province-based Shagang hiked its longs prices for late July, Shougang made considerable upward adjustments to its ex-factory prices of long products for August, while Hebei Steel Group also raised its prices sharply for August. As a result, other leading mills also increased their ex-factory prices. Thus, boosted by the growing levels of material costs and by the brisk performance in the futures market, the Chinese longs market climbed up again in the past week.
In the east, market prices saw an overall rise during the past week, with increases of RMB 30-90/mt recorded in the Shanghai and Jinan markets and increases of RMB 100-150/mt in the other markets. Meanwhile, due to the rising prices, many end-side buyers have adopted a wait-and-see stance as regards market trading.
Driven by the raised ex-factory prices from leading mills in the east and north, southern China-based mills successively hiked their prices in the past week, thereby boosting market prices. With limited demand, trading activity in the south has seemed quite flat throughout the past week.
In northern China, the market prices first slipped back before climbing up significantly under the influence of the sharp upward adjustment made by Hebei Steel Group for its August prices.
Last week, the rebar price in the Chinese futures market surged strongly by RMB 177/mt or 4.42 percent to RMB 4,184/mt, rising above the spot market levels and indicating strong market confidence as regards the future trend of the market.
On the raw material side, the domestic pig iron market retained its rising trend over the past week, while the scrap market went up steadily. Furthermore, billet prices moved up in a context of normal levels of trading.
Overall, the Chinese long products market is now on a strong rising trend, against the background of the mills' increased mills and the active futures market.
According to the latest statistics, China's rebar production in June totaled 10.9527 million mt, up 2.7829 million mt or 34.1 percent year on year, the second straight month in which rebar production has exceeded 10 million mt. Average daily production during the month reached 365,100 mt, up by 41,800 mt or 12.92 percent month on month. Meanwhile, Chinese rebar production for the January-June period amounted to 57.7597 million mt, up 10.4277 million mt or 22 percent year on year.
China's rebar exports in June stood at 21,800 mt, down 51,500 mt or 70.25 percent year on year, totaling $13 million in value, down $50 million or 79.08 percent compared with the same month last year. The average export price was $601.92/mt. Total rebar exports in the January-June period reached 177,800 mt, down 471,500 mt or 72.61 percent, amounting to $110 million in value, down $345 million or 75.82 percent year on year.
Rebar imports in June stood at 2,200 mt, down 300 mt or 12.53 percent year on year, totaling $2 million in value, up $500,000 or 32.68 percent compared with the same month last year. The average import price was $848.14/mt. Total January-June rebar imports reached 15,500 mt, down 1,600 mt or 9.45 percent, amounting to a total value of $12 million, up $3 million or 36.03 percent year on year.
Meanwhile, China's wire rod production in June totaled 8.7065 million mt, up 1.1223 million mt or 14.8 percent year on year. Average daily production during the month reached 290,200 mt, up by 30,400 mt or 11.71 percent month on month. Meanwhile, Chinese rebar production for the January-June period reached 44.8812 million mt, up 3.985 million mt or 9.7 percent year on year.
China's wire rod exports in June totaled 89,600 mt, down 518,500 mt or 85.26 percent year on year, totaling $45 million in value, down $474 million or 91.34 percent compared with the same period last year. The average wire rod export price was $501.63/mt. Total exports in January-June reached 374,500 mt, down 2.0334 million mt or 84.45 percent, amounting to $197 million in value, down $1.649 billion or 89.32 percent year on year.
Wire rod imports in June amounted to 41,000 mt, down 2,700 mt or 4.08 percent year on year, totaling a value of $40 million, down $20 million or 33.04 percent compared with the same period last year. The average wire rod import price was $977.49/mt. Total imports in January-June reached 194,100 mt, down 79,900 mt or 29.16 percent, amounting to $208 million in value, down $113 million or 35.31 percent year on year.