Posted on 30 Sep 2022
Total stocks of five major finished steel products held by the Chinese trading houses Mysteel tracks regularly declined for a second week by another 859,800 tonnes over September 23-29, more sharply than the fall of 341,700 tonnes in the prior week, Mysteel's weekly survey shows.
The rapid decline in inventories was largely because many end-users replenished products to fulfill their actual demand with the week-long National Day holiday (over October 1-7) approaching, sources said.
As of September 29, inventories of the five steel items comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by surveyed traders in the 132 cities under Mysteel's survey had slipped by 4.7% on week to 17.4 million tonnes, an eight-month low.
Among the five items, the stocks of rebar and wire rod still thinned the most, with the tonnage of the former sliding by 445,600 tonnes on week to 7.1 million tonnes as of September 29, and that of rods dwindling by 174,900 tonnes on week to 2.5 million tonnes, the survey data showed.
Chinese finished steel prices had shown signs of strengthening during the week, and by September 28, the country's national price of HRB400E 20mm dia rebar, a key indicator of domestic steel-market sentiment, was assessed by Mysteel at a near one-month high of Yuan 4,158/tonne ($577/t) including the 13% VAT, or climbing by Yuan 68/t on week.
The speculative buying among market participants and the accumulation of stocks among end-users saw the daily trading volume of construction steel including rebar among the 237 trading houses Mysteel samples jump by a large 38.5% or 62,931 tonnes/day on week, reaching an average of 226,192 t/d over September 22-28.
Meanwhile, lower output among steel mills also contributed to the decline in stocks, with the production of the five steel items among the 184 Chinese steelmakers Mysteel checks dipping 6% or 186,300 tonnes on week to 9.6 million tonnes over September 22-28.
As of September 29, the inventories of the five finished steel products in Mysteel's former smaller sample in just 35 cities also decreased for the second week, down 459,600 tonnes or 4.2% during the same period to 10.4 million tonnes.