Steel stocks held by Chinese traders grow 0.5% w-o-w

Stocks of the five major finished steel products held by traders increased for a fifth consecutive week over July 17-23, but only by 0.5% on week, as against the 1.5% on-week rise in the prior period, Mysteel Global noted. The more sedate rise indicated that actual demand has been picking up as the rains impacting South and East China have receded.

The inventories of rebar, wire rod, medium plate, hot-rolled coil and cold-rolled coil among traders in China’s 132 cities climbed by a further 122,600 tonnes on week to 22.9 million tonnes as of July 23, with the pace of growth slowing from the 346,600 surge in the prior week, Mysteel’s survey showed.

“The intense rainfalls have eased in the southern and eastern regions of China, which saw actual steel demand recovering of late,” an East China-based market insider said. “The recent upward corrections in steel futures prices have strongly propped up market sentiment,” she added.

Over July 20-22, the daily trading volume of rebar, wire rod and bar-in-coil among 237 traders across the country averaged 223,860 tonnes/day, well above the threshold of 200,000 t/d during the peak consuming season in spring, Mysteel’s data showed.

The most-traded rebar contract on the Shanghai Futures Exchange, that for October delivery, gained Yuan 87/tonne ($12.4/t) from the settlement price on July 16 to close the daytime session on July 23 at Yuan 3,806/t.

“What the market cares most about now is how much the scorching weather after the wet season might affect steel demand,” the source said. Guangzhou in South China’s Guangdong province will be experiencing high temperatures of up to 37 Celsius degrees in the coming week, Mysteel Global noted.

In the meantime, steel inventories among traders in Mysteel’s former smaller sample across just 35 cities also gained by a small 132,900 tonnes or 0.9% on week to 15.5 million tonnes over July 17-23, or some 23.5% higher on year.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo: World Steel