Posted on 18 Nov 2022
Inventories of the five major finished steel products held by Chinese traders checked by Mysteel decreased for a sixth consecutive week over November 11-17 to hit a 10-month low, or down 4.8% on week, the latest survey showed. The reduction reflected the modest rise in procurement among end-users during the period, and the easing of logistics disruptions after the central government said it would optimize COVID-19 prevention and control measures, sources said.
The stocks survey among traders in 132 cities under Mysteel's tracking found that their inventories of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate dropped by another 727,500 tonnes on week to 14.4 million tonnes as of November 17. The pace at which the stocks fell was faster than the 636,300 tonnes decline in the prior week.
"The recent strengthening of finished steel prices has also led to an improvement in spot trading in our local market," said an industry watcher based in Southeast China's Fujian. The country's national price of HRB400E 20mm dia rebar had climbed by Yuan 57/tonne ($8/t) on week to reach Yuan 3,970/t including the 13% VAT as of November 16, according to Mysteel's assessment.
Meanwhile, the daily trading volume of rebar, wire rod and bar-in-coil among the 237 traders nationwide regularly sampled by Mysteel witnessed an uptick of 1% on week to average 171,399 tonnes/day over November 10-16, new data showed.
On the other hand, lower output among steel mills also contributed to the further decline in inventories, with production of the five steel items among the 184 Chinese steelmakers Mysteel follows falling for the third week, down by 1.3% on week to a 2.5-month low of 9.3 million tonnes over November 10-16.
Among the five steel products, rebar stocks again declined the most, tumbling by 262,900 tonnes on week to 5.6 million tonnes as of November 17. Those of HRC slipped 193,700 tonnes over the same period to 3.2 million tonnes, the survey showed.
But some market sources were concerned that the pace of destocking will slow, as rain, heavy snowfalls and plunging temperatures may sweep across the northern parts of China in coming days, and steel demand there may gradually come to a standstill.
Meanwhile, steel inventories at traders in Mysteel's former smaller sample across just 35 cities declined for the sixth week too, down 3.7% or 344,400 tonnes on week to 8.8 million tonnes by November 17.
Source:Mysteel Global
