Posted on 25 Apr 2022
Inventories of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the 184 Chinese steel mills under Mysteel's regular survey reversed down over April 14-20 after mounting for two weeks, edging down 0.1% on week to 6.84 million tonnes.
The on-week retreat was mainly thanks to improved transport services and the further recovery in demand, with the tonnage of rebar and wire rod down 50,800 tonnes and 26,400 tonnes on week respectively, the survey showed, while stocks of flat steel increased by varying degrees this week due to the higher output of these products.
"The domestic steel mills increased their deliveries to traders' warehouses this week as transport improved further," a market source in Shanghai explained.
Although demand remained stagnant in some regions where new COVID-19 cases were found, consumption from end-users in other regions recovered further with the pleasant spring weather, Mysteel Global learned.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese traders under Mysteel's regular survey registered 178,284 tonnes/day on average over April 14-20, higher by 17,223 t/d or 10.7% from one week earlier.
Over April 14-20, total production of the five major steel products among the sampled steel mills grew to 9.94 million tonnes, up for the third week by another 0.6% from the prior week, according to the survey.
However, despite the continuous rise since April, steel output among domestic mills remains at a relatively low level for the time being. Moreover, the growth is likely to be limited longer term as Beijing has mandated a further reduction in crude steel output this year to encourage the country's steel industry to pursue "high-quality" development, as Mysteel Global reported.
Chinese steel prices strengthened this week on support of positive sentiment in the domestic market, with the national price of HRB400E 20mm dia rebar, for example, reaching Yuan 5,140/tonne ($797/t) including the 13% VAT as of April 20, higher by Yuan 48/t on week, according to Mysteel's assessment.
Over April 15-21, inventories of these five steel products at commercial warehouses in the 132 Chinese cities under Mysteel's survey slipped continuously for the seventh week to 25.43 million tonnes, down another 1.7% from one week before, the survey showed.
Source:Mysteel Global
