Posted on 12 Mar 2021
The inventories of finished steel products sitting in the warehouses of Chinese traders finally retreated over March 5-11 after steadily mounting since January, Mysteel’s latest stocks survey shows. But the decrease was a mere 1% on week and was mainly due to the improved consumption, the survey results indicate.
The stocks of five major steel products held by traders in 132 cities declined 329,800 tonnes on week to around 34 million tonnes as of March 11, the survey showed. The five items comprise of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate.
“The current stock levels are still high, but we’ve seen demand picking up so I think the optimism for the market is valid,” a steel trader in East China’s Zhejiang province said. “For example, construction work on infrastructure projects resumed from around late February and this year, the demand has recovered faster than in previous years,” she noted.
The daily trading volume of construction steel including rebar, wire rod and bar-in-coil among 237 traders across the country checked by Mysteel increased 13% on week to average 162,173 tonnes/day over March 4-10, the data showed.
But market sources are still worried about financial liquidity. “Payments extended for downstream projects after the Chinese New Year holiday have not been so large and this, coupled with the central bank’s tightening of monetary policies, has meant that funds are a little tight now,” another East China-based steel trader said.
Moreover, as measures to control the COVID pandemic both within China and outside are slowly improving the situation, so limits on available capital will very likely toughen, meaning that in this year’s second half, risks remain, according to him.
Among the five steel items, the stocks of wire rod witnessed the sharpest decline, plunging by 144,300 tonnes on week to 6.6 million tonnes as of March 11, the survey showed.
The inventories of finished steel products in Mysteel’s former smaller sample across just 35 cities also reversed down last week by another 135,500 tonnes on week to 22.2 million tonnes as of March 11.
Source:Mysteel Global
