China retail steel stocks hit 10-m low on improved buying

Posted on 26 November 2021

Stocks of five major steel products at commercial warehouses across the 132 Chinese cities under Mysteel tracking hit a 10-month low of 15.8 million tonnes as of November 25, as buying sentiment improved with the pickup in steel prices and the acceleration of work on construction projects before year-end.

 

Over November 19-25, stocks of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate declined for the seventh week in a row, down another 711,400 tonnes or 4.3% on week, according to the survey.

Among these five major steel products, rebar posted the sharpest decline, falling 6.9% on week to 6.5 million tonnes as of November 25, or a low since January 15, the data showed.

"Construction companies in the East and South China have been accelerating work before winter temperatures drop to a level that is too low for outdoor construction activity to continue," a steel trader based in East China observed. He noted that building contractors are still slow making payments due to cash constraints.

The trading volume of construction steel comprising of rebar, wire rod and bar-in-coil averaged 194,886 tonnes/day over Monday-Wednesday, up 6% on week, according to Mysteel's survey across 237 domestic steel traders.

Buying activity is also being boosted by the rebound in steel prices, market sources noted. "People are active in buying when prices are on the rise. Nevertheless, after traders sold off their stocks during the previous price retreats, they (the buyers) will find they have nowhere to source the steel!" quipped an official from a steel mill based in East China's Shandong province.

As of November 25, the national HRB400E 20mm rebar price assessed by Mysteel had increased for the fourth consecutive working day to reach Yuan 4,820/tonne ($754.9/t), up another Yuan 28/tonne on day or Yuan 104/t from an eight-month low a week ago.  

As of November 25, inventories of the five steel products under Mysteel's smaller-scale survey among the retail warehouses in 35 Chinese cities also fell to a 10-month low of 10.4 million tonnes, or down for the seventh straight week by another 435,300 tonnes or 4% on week.

Source : Mysteel Global