Chinese producers cut April crude steel output by 7.2% from a year earlier to 85.94 million tons due to weak construction steel demand.
April output also decreased 2.6% from 88.27 million tons in March. This contributed to a 3% year-on-year decrease in steel output from January to April to 343.67 million tons, according to data from China’s National Bureau of Statistics (NBS) on May 17.
Shanghai rebar spot prices fell to a multi-year low of 3,400 yuan/ton ($470.76/ton) on April 1. But the factory’s output cuts rebalanced the market in April and prices began to bottom out in mid-April. Shanghai rebar prices increased again by 180 yuan/ton from April 5 to 3,590 yuan/ton. tons until April 18. Most Chinese factories turned from losses in March to profits of 100-150 yuan/ton at the end of April.
Market participants said factories would likely increase output in May compared with April but overall output could still be lower than a year earlier.
China’s domestic construction steel demand has been weak since the beginning of this year due to a lack of infrastructure projects and a sluggish real estate market. China asked 12 debt-ridden provinces to stop new subway and rail projects in urban areas to prevent debt risks last December.
NBS data showed that investment in the real estate sector fell 9.8% on the year to 3.093 trillion yen in the January-April period. The number of new startup projects by region fell by about 25 % compared to a year earlier and real estate sales by region fell 20% in the year from January to April.
Satthep.net
