Posted on 10 Dec 2021
Over December 3-9, total stocks of the five major finished steel products at commercial warehouses in the 132 Chinese cities Mysteel tracks declined for the ninth straight week and hit a 10.5-month low of 14.7 million tonnes, the regular stocks survey found. This was also down 2.8% or 424,300 tonnes on week.
During the week, inventories of rebar, wire rod, cold-rolled coil and medium plate at the surveyed trading houses registered on-week falls, while hot-rolled coil stocks reversed up after declining for eight consecutive weeks, the survey indicated.
Among them, rebar stocks dropped the most, sliding by 318,500 tonnes on week to 5.7 million tonnes, the survey data show, a new low since January 8. Stocks of wire rod also shed a large 95,100 tonnes on week to a 10.5-month low of 2.2 million tonnes.
The steel stocks continued registering steady falls this week even though steel output had reversed up. Over December 2-8, the 184 Chinese steel mills that Mysteel surveys produced about 9.1 million tonnes of these five steel products, reversing up 1.7% or 154,400 tonnes on week after five weeks of falls.
On the one hand, the steady decline in stocks was thanks to the acceleration of construction work in southern China where temperatures are tolerable for outdoor construction activity and where contractors are rushing to finish projects before year's end. On the other hand, the stocks fall also reflected the tendency of traders to maintain their stocks at a reasonable level, as they are uncertain about market price movements in the months ahead, market sources indicated.
"In the short term, construction in southern China has been accelerating, and the demand is giving support to prices," a steel trader based in Jiangsu said.
"However, with the temperatures nationwide steadily declining, steel demand will surely shrink, exerting greater downward pressure on prices. Given these uncertainties, we're struggling to decide whether to buy in more products at the moment or not," the trader added.
As of December 8, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had rebounded by Yuan 64/tonne ($10.1/t) on week to Yuan 4,847/t including the 13% VAT.
By December 9, inventories of these five steel products under Mysteel's smaller-scale survey among trading houses in 35 Chinese cities decreased for the ninth straight week to 9.6 million tonnes, down by another 3.4% or 334,400 tonnes on week -also a 10.5-month low.
Source:Mysteel Global
