Posted on 25 Feb 2022
Last week, China's stocks of finished steel continued to swell for the seventh week in a row as steel demand has yet return to normal after the Chinese New Year (CNY) holiday break over January 31-February 6, market sources noted. Nevertheless, the pace of the inventory growth was slower than during the prior week, Mysteel data shows.
Stocks of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate in the 132 cities regularly surveyed by Mysteel totaled 26.2 million tonnes as of February 24, up 8.7% on week, which was slower than an on-week rise of 10.6% over February 11-17.
The stocks at traders refreshed a ten-month high as of February 24, but it still stood 20.1% lower on year and 23.7% down compared with the second week following last year's CNY holiday, Mysteel Global noted.
"Steel demand has not yet started to revive (after the CNY)," observed a steel trader based in Beijing regarding the continued accumulation of steel inventories.
Mysteel's daily survey on steel trading supported his observation. Over Monday to Wednesday this week, the trading volume of construction steel comprising rebar, wire rod and bar-in-coil across 237 steel traders nationwide averaged 123,932 tonnes/day, up from only 74,378 t/d during the prior week. The volumes, however, were much lower than the level of 160,000-170,000 t/d considered normal for a typical winter day.
Several factors are contributing to the slow revival of steel demand, market sources pointed out on Thursday. These include snowy weather in parts of the Central, Southwest and East China over the week that hindered outdoor construction activity, the sporadic resurgence of COVID-19 cases inside China and the continuing tight liquidity that many end users are suffering.
Even though Beijing has adopted a succession of measures to increase domestic liquidity, "construction projects are securing funding from the banks and financial institutions very slowly," the Beijing trader pointed out.
Meanwhile, stocks of these five finished steel products in Mysteel's former smaller sample across just 35 cities also gained by another 5.2% on week to 17.6 million tonnes as of February 24.
Source:Mysteel Global
