Posted on 20 May 2022
Inventories of the five major finished steel products held by Chinese traders continued to decline for the second week over May 13-19, though the pace had slowed to 1.7% on week, as against the 3% drop a week earlier. Slowing the pace of decline was the weakness of steel demand, despite the fact that the caseload of COVID infections had eased in some cities such as Shanghai, sources said.
"It's hard to see actual demand for steel products demonstrating any positive increment in the short run," commented a Shanghai-based industry watcher.
Total stocks of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at trading houses in the 132 Chinese cities under Mysteel's tracking dropped by 422,300 tonnes on week to 24.1 million tonnes as of May 19, Mysteel's latest survey data showed.
Rebar and wire rod contributed 74% of the decline in total stocks, with stocks of the former down by 153,700 tonnes on week at 12 million tonnes as of May 19, while those of rods shed 158,300 tonnes on week to 3.7 million tonnes, according to the survey.
"Also, as the low steel consumption season is approaching bringing rains and hot weather to many regions of China, this may also affect the demand from building contractors as outdoor construction activities may be disrupted," he added.
The daily trading volume of rebar, wire rod and bar-in-coil among the 237 Chinese traders under Mysteel's monitoring lost 12,699 tonnes/day or 8.1% on week to 144,341 t/d on average over May 12-18.
During the week, the price downtrend in the domestic steel market had also impacted market sentiment, with the national price of HRB400E 20mm dia rebar, for example, falling by a total of Yuan 111/tonne ($16.4/t) on week to reach a 2.5-month low of Yuan 4,874/t including the 13% VAT as of May 18.
Stocks of the five major steel items in Mysteel's smaller sample across just 35 cities also declined, down 1.9% or 291,600 tonnes on week to 15.2 million tonnes by May 19.
Source:Mysteel Global
