Posted on 16 Apr 2021
The stocks of finished steel held by Chinese traders sampled by Mysteel declined by another 1.5 million tonnes on week over April 9-15 amid steady steel demand and despite steel prices still hovering high, Mysteel Global noted.
The inventories of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at trading warehouses in 132 cities nationwide lost 5.2% on week to reach 26.9 million tonnes as of April 15 and made for the sixth straight weekly fall. This compares with the decline of 4.3% on week seen in the prior period, according to Mysteel’s latest stocks survey.
The declines in traders’ steel stocks were mainly due to the strong sales, with the daily trading volume of construction steel including rebar and wire rod over April 8-14 being up 5.5% on week to average 248,658 tonnes/day, the survey among 237 Chinese steel traders showed.
Yet the traders’ business wasn’t evidently harmed by the resilience that rebar prices are displaying just now. As of April 14, the national price of HRB400 20mm dia rebar assessed by Mysteel hovered high at Yuan 5,100/t ($780/t), and though this was coming off its 9.5-year high of Yuan 5,128/t reached on April 7 (and down by Yuan 28/t on week), the price was still high nonetheless, sources noted.
“I do believe there is still rising space for steel prices,” an East China-based steel trader said. “The declines in steel production due to the curbs in Tangshan (in North China’s Hebei province) could not be filled up in the near term while the demand is good,” he explained.
But he also noted that steelmakers are enjoying handsome profits, and reallocation of profits across the whole industrial chain including upstream raw materials suppliers and end-users was possible. But he noted to that even if steel prices undergo some downward corrections, the room for declines would be very limited amid the sound fundamentals.
The inventories of finished steel products in Mysteel’s former smaller sample across just 35 cities also declined 988,500 tonnes on week to 17.8 million tonnes as of April 15.
Source:Mysteel Global
