Posted on 08 Jul 2022
Stocks of the five major finished steel products held by Chinese traders nationwide decreased for a third consecutive week over July 1-7 to reach a five-month low, or down 2.3% on week, Mysteel Global noted, due mainly to the on-week fall in production.
The inventories of rebar, wire rod, medium plate, hot-rolled coil and cold-rolled coil among traders in the 132 Chinese cities Mysteel follows dropped by some 537,900 tonnes on week to 23.1 million tonnes as of July 7, with the pace slowing from the 622,100 tonnes decline in the prior week, Mysteel's survey showed.
In addition, actual demand from infrastructure and housing projects has recovered recently. "Several of our projects have been restarted as the government ordered construction sites to resume work as soon as possible," a source from a Shanghai-based construction company said.
Many Chinese mills had reinforced their production curbs and maintenance stoppages to avoid further losses, according to an analyst in Shanghai. Production of the five finished steel products among 184 Chinese steel mills Mysteel monitors hit a 4.5-month low of 9.2 million tonnes over June 30-July 6, slipping 2.8% on week and making for a four-week fall.
A market source remarked that the resurgent COVID-19 outbreaks in some parts of the country, plus the arrival of hot and humid weather, had impeded spot trading to some extent. The daily trading volume of rebar, wire rod and bar-in-coil among the 237 Chinese traders Mysteel monitors reversed down by 14.3% on week to average 151,364 tonnes/day over June 30-July 6.
"Market participants were not generally optimistic about the steel demand outlook, given the scorching temperatures and the off-season for steel consumption," an industry watcher said.
In the coming week, heat waves are expected to blanket many regions of China, and some areas in the middle and lower reaches of the Yangtze River and the Sichuan Basin may experience temperatures of over 40 Celsius degrees, Mysteel Global noted from the country's National Meteorological Center.
As of July 6, China's national price of HRB400E 20mm dia rebar, a barometer of the country's spot steel-market sentiment, had lost Yuan 103/tonne ($15.4/t) on week to Yuan 4,272/t including the 13% VAT, according to Mysteel's assessment.
Meanwhile, steel inventories among traders in Mysteel's former smaller sample across just 35 cities also thinned for the third straight week, down 2.7% or 405,600 tonnes on week to a five-month low of 14.7 million tonnes as of July 7, or 2.8% lower on year.
Source:Mysteel Global
