Posted on 06 Dec 2021
Stocks of the five major steel products held by the 184 Chinese steel mills that Mysteel regularly surveys declined faster this week, with their inventories shrinking by 8.7% over November 25-December 1 to 5.1 million tonnes, the latest survey has found. The faster depletion ofstocks was due toscheduled maintenance stoppages among some steelmakers at a time when their sales are steady, market sources said.
The five steel products comprise of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate. By Wednesday, the stocks at the mills had declined for three consecutive weeks, though this week's fall was much faster than the 2.4% on-week decline over the previous survey period, Mysteel Global noted.
"Many mills have been carrying out regular maintenance, but their sales continue, so the stocks have been emptying gradually," observed an official from a steel mill based in North China's Inner Mongolia.
Steel mills, especially those located in northern China where winters are particularly fierce, tend to schedule their annual maintenance during the winter months when steel demand over the period is low, according to him.
Mysteel's latest survey showed that the output of these five major products among the 184 mills also decreased for the fifth straight week this week. Production fell by another 0.7% on week to 8.9 million tonnes over November 25-December 1.
Nevertheless, the official predicted that steel production would pick up later this month or in early January with mills resuming operations, though the pace of resumption might vary from region to region.
Mysteel's other survey indicated that 13 blast furnaces across China are scheduled to be brought back online within this month. Were this to happen, it would raise the country's molten iron output to 2.06 million tonnes/day from less than 2 million t/d at present. Moreover, another three blast furnaces are also being considered for restarting, Mysteel Global understands.
The continuous falls in stocks at their yards are seeing some mills move to support their sales prices. For example, Shagang Group, China's largest privately-owned producer in East China, has decided to roll over its list prices of rebar, wire rod and bar-in-coil for sales over December 1-10, as reported.
"The mills' stocks continue to fall, and now there is even some shortages of long steel products of certain specifications in the market," a steel trader based in East China noted.
Table 1 Five major steel products stocks at mills (Nov 25-Dec 1)
|
Product |
Volume ('000 t) |
WoW (%) |
MoM (%) |
YoY (%) |
|
Rebar |
2,286.6 |
-13.7% |
-18.4% |
-8.3% |
|
Wire rod |
842.5 |
-6.4% |
-10.5% |
28.7% |
|
HR sheet |
902.0 |
-3.6% |
2.2% |
-3.6% |
|
CR sheet |
331.1 |
-4.5% |
3.5% |
3.8% |
|
Medium plate |
759.2 |
-2.5% |
4.7% |
-4.6% |
|
Total |
5,121.4 |
-8.7% |
-9.7% |
-1.5% |
Table 2 Five major steel products stocks at traders (Nov 26-Dec 2)
|
Product |
Volume (million t) |
WoW (%) |
MoM (%) |
YoY (%) |
|
Rebar |
6.06 |
-6.2% |
-22.7% |
-4.8% |
|
Wire rod |
2.31 |
-5.3% |
-14.0% |
22.3% |
|
HR sheet |
3.13 |
-2.0% |
-11.9% |
9.1% |
|
CR sheet |
1.86 |
-0.1% |
-2.3% |
19.6% |
|
Medium plate |
1.81 |
-1.6% |
-14.4% |
-3.1% |
|
Total |
15.17 |
-3.9% |
-16.2% |
4.3% |
Note: Mysteel has started publishing the new set of data regarding traders' steel inventories since March 19 2020 to better represent the market with bigger sample sizes.
Rebar and wire rod: Sample size is increased to 429 warehouses in 132 Chinese cities from the previous 215 warehouses in 35 cities.
Hot-rolled coil (HRC): Sample size is increased to 194 warehouses in 55 cities from the previous 138 warehouses in 33 cities.
Cold-rolled coil (CRC): Sample size is increased to 182 warehouses in 29 cities from the previous 134 warehouses in 26 cities.
Medium plate: Sample size is increased to 217 warehouses in 65 cities from the previous 132 warehouses in 31 cities.
Source:Mysteel Global
