Posted on 06 Jan 2023
Inventories of the five major carbon steel products held by the 184 Chinese steel mills under Mysteel's regular survey thinned slightly over December 29-January 4 after mounting for the two previous weeks, with the total volume declining by 1.6% on week to 4.3 million tonnes. The five comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate.
The retreat was mainly due to the faster decrease in steel output, as more Chinese steelmakers, particularly the electric-arc-furnace mills, conducted maintenance on their steelmaking facilities during the survey period. The mills were responding to the further shrinking of demand among end-users with the Chinese New Year holiday beginning later this month, Mysteel Global noted.
Over December 29-January 4, total production of the five major steel products among the surveyed steel mills slipped for the third week to settle at a five-month low of 8.84 million tonnes, down by a sharper of 3.7% on week against the on-week fall of 0.4% over the prior week.
Domestic steel demand from users shrank further this week, as more construction companies have halted work on building sites to let workers start their holidays in advance of the official start in late January, Mysteel Global noted.
For example, 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 decreased steadily to average 102,186 tonnes/day over December 29-January 4, down another 8,938 t/d or 8% from the previous week.
Inventories of the five steel items at commercial warehouses in the 132 Chinese cities under Mysteel's regular survey accumulated faster to reach 15.4 million tonnes during December 30-January 5, due to the thinning demand. The traders' stocks were up for the second week by another 8% on week, compared with the on-week rise of 3.3% over the prior week.
However, Chinese steel prices kept firm during the survey week as the production costs being borne by the mills remain high. The national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, reached Yuan 4,198/tonne ($611/t) including the 13% VAT as of January 4, higher by another Yuan 63/t on week.
Source:Mysteel Global
