China mills’ steel stocks mount by 5.7% on week
Stocks of the five major finished steel products held by the 184 Chinese steel mills monitored regularly by Mysteel grew faster over January 21-27 as demand from end-users weakened further with the upcoming Chinese New Year holiday over February 11-17, Mysteel’s latest weekly survey showed.
Total inventories of the five major finished steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the surveyed mills’ yards increased for the fifth week to 6.3 million tonnes as of January 27, making for a larger on-week rise of 5.7% compared with the prior week’s climb of 3.3%, according to the survey.
“It is very normal to see a continuous rally in mills’ and traders’ steel inventories ahead of the CNY holiday, as many construction workers are already on their way home,” a market source in Shanghai said, adding that the domestic steel market is expected to quieten further in the coming two or three weeks.
This was in line with the results of Mysteel’s daily survey among the 237 trading houses across China, which showed that their daily trading volume of construction steel including rebar, wire rod and bar-in-coil had dropped below 100,000 tonnes/day over January 21-27 to register 79,564 t/d, slumping by nearly 40% compared with the average for the previous week, according to Mysteel’s data.
The plummeting demand and high production costs they’re struggling with have persuaded many Chinese mills to conduct maintenance on their steelmaking facilities, leading to the further decline in mills’ steel output, Mysteel Global noted. Over January 21-27, total output of the five major items among the surveyed steel mills slipped for the third consecutive week, down by another 1.3% on week to 10.3 million tonnes.
Finished steel stocks of the five steel products at traders’ warehouses in the 132 cities Mysteel checks had swollen to 18 million tonnes as of January 28, jumping by 13.8% on week and higher by 5.9 percentage points from the prior week, the survey showed.
Chinese domestic steel prices have been fluctuating within a narrow band in a quiet market of late. For example, the national price of HRB 400 20mm dia rebar, a bellwether of steel-market sentiment, has been hovering around Yuan 4,350/tonne ($671/t) for the past week. The price was at Yuan 4,354/t including the 13% VAT as of January 27, up Yuan 14/t from one week ago, according to Mysteel’s data.
Source: My Steel