Posted on 30 Dec 2022
Inventories of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills under Mysteel's regular survey continued to climb during December 22-28 to reach 4.37 million tonnes, higher by another 1.2% from the previous week.
The rally was most evident in the inventories of long steel, with the volumes of rebar and wire rod rising by 18,900 tonnes and 59,100 tonnes respectively on week, while the tonnages of flat steel decreased by varying degrees during the period, the survey showed.
The further accumulation was mainly blamed on the thinning demand of end-users, reflecting the cold winter days in northern China and the looming Chinese New Year holiday in late January.
Besides, domestic steel prices in the physical market stayed high – buoyed by the strength of the futures market – which dampened the demand for speculation, as many market participants were cautious about building up stocks while prices were currently high, according to a market source in Shanghai.
Over December 22-28, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's tracking slipped continuously to 111,124 tonnes/day on average, down by another 21,371 t/d or 16.1% from one week earlier.
As of December 28, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 4,135/tonne ($594/t) including the 13% VAT, gaining Yuan 25/t on week.
On the same day, the most-traded rebar contract on the Shanghai Futures Exchange for May delivery closed the daytime trading session at Yuan 4,050/t, up Yuan 72/t from the settlement price on December 21.
Over December 22-28, total production of the five major steel products among the surveyed steel mills decreased for the second week by another 0.4% on week to 9.17 million tonnes, as more mills conducted maintenance on their steelmaking facilities at the end of year, given their high production costs and shrinking demand for their steel.
Inventories of the five steel items at commercial warehouses in the 132 Chinese cities under Mysteel's regular survey also mounted during December 23-29 after sliding for two weeks, climbing by 3.3% on week to 14.25 million tonnes, according to the survey, indicating that consumption among steel end-users remains limited.
Source:Mysteel Global
