Inventories of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills sampled in Mysteel’s regular survey reversed down during September 22-28 after rising for two weeks, dropping by 7.7% on week to an eight-month low of 4.63 million tonnes, thanks to better demand before the National Day holiday over October 1-7.
Stocks of all the five major steel items emptied by varying degrees this week, with inventories of rebar and wire rod experiencing the largest on-week falls of 12.7% and 6.2% respectively, according to the survey.
One major reason for the sharp drop in mills’ inventories was the better demand from end-users. “Steel transactions in the physical market improved significantly this week, as many end-users returned to the market for replenishment before the week-long break,” a market source in Shanghai said.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel’s tracking averaged 226,192 tonnes/day over September 22-28, surging by 62,931 t/d or 38.6% from the prior week.
Besides, some Chinese steel producers conducted maintenance on their steelmaking facilities this week, with the decrease in mills’ output also contributing to the tumble in mills’ finished steel inventories, Mysteel Global learned.
Over September 22-28, total production of the five major steel items among the surveyed steel producers came in at 9.6 million tonnes, falling by 1.9% on week and ending the continuous rally over the prior eight weeks.
Chinese steel prices strengthened this week with the improved sentiment in the domestic market. As of September 28, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 4,158/tonne ($578/t) including the 13% VAT, higher by Yuan 68/t from one week before.
Inventories of these five steel products at commercial warehouses in the 132 Chinese cities Mysteel regularly monitors slipped by another 4.7% on week to 17.35 million tonnes over September 23-29, touching the lowest since late January, the survey showed.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article- exchange agreement between Mysteel Global and SteelMint.
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