Posted on 16 Jun 2023
The slide in finished steel inventories held by the Chinese traders in 132 cities sampled in Mysteel's survey continued during June 9-15, falling by another 309,000 tonnes on week. However, the pace at which the stocks were leaving the traders' yards had slowed markedly, Mysteel Global notes, given that in the prior week the drop had totalled 461,800 tonnes.
Industry watchers mainly attributed the slower destocking to waning demand in parts of the country caused by incessant rains or high temperatures.
The stocks of five finished steel items comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate in the traders' warehouses fell for the fifth straight week, declining by 1.7% on week to 17.6 million tonnes as of June 15. Most of the stocks comprised rebars, with the total at 7.9 million tonnes, being down by 191,800 tonnes on week, the latest stocks survey showed.
"Many regions in southern China have been experiencing prolonged rains, and work on local construction sites has slowed as a result," said a market source, adding that the rainy weather may linger a while longer in these areas.
On Thursday, the National Meteorological Center said that heavy rain or rainstorms will hit parts of Guangdong, Guangxi and Fujian provinces over June 16-19.
Also on Thursday, the Center renewed an 'orange' alert for high temperatures as heatwave conditions would continue in many regions of the country, with parts of North China's Beijing, Tianjin, Hebei and Inner Mongolia, Central China's Henan, East China's Shandong and Anhui and Northwest China's Xinjiang seeing scorching temperatures of 37 to 39 degrees Celsius during the day on Thursday.
On the other hand, higher output among steel mills also contributed to the slower decline in stocks, with production of the five steel items among the 184 Chinese steelmakers Mysteel samples rebounding by 22,500 tonnes on week to 9.3 million tonnes over June 8-14.
Over June 9-15, finished steel stocks held by traders in Mysteel's former smaller sample across just 35 cities thinned too, declining by 353,400 tonnes or 3% on week to 11.3 million tonnes, Mysteel's data showed.
Source:Mysteel Global
