Posted on 23 May 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 slightly by 0.2% on week over May 12-18 after the continuous rise over the prior three weeks, mainly thanks to increased deliveries to traders' warehouses and the decrease in mills' output.
Total stocks of the five major items reached 6.99 million tonnes as of May 18, dipping by 14,300 tonnes from the previous week, the survey showed.
"With the improvement of transport services in East and North China, domestic steel mills focussed on shipping more products to the market this week to ease their inventory pressure," a market source in Shanghai said, adding that the significant fall in output also contributed to the decrease in mills' stocks.
Over May 12-18, total production of the five major steel items among the sampled mills retreated to 9.93 million tonnes, down 1.6% on week after mounting for the prior two weeks, the survey showed. Having lost money from the fall in steel prices, more Chinese steelmakers reduced production or scaled back operations to conduct maintenance.
For example, China's national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 4,874/tonne ($721/t) including the 13% VAT as of May 18, lower by another Yuan 111/t from one week earlier and hitting the lowest since March 1.
Demand from end-users remained depressed as restrictions in many regions of China have not been fully lifted with the ongoing impact of resurging COVID cases. In parallel, the early monsoon rains in southern China also affected steel purchasing by local building contractors, Mysteel Global noted.
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 averaged only 144,341 tonnes/day over May 12-18, lower by 12,699 t/d from the prior week.
Over May 13-19, inventories of these five steel items at commercial warehouses in the 132 Chinese cities under Mysteel's survey continued declining to 24.11 million tonnes, but the on-week fall slowed to 1.7% from the 3% during the previous week.
Source:Mysteel Global
