Inventories at key Chinese steel
mills monitored by CISA reached 10.98 million tonnes by the end of January, the
highest since the second half of 2009 and rising 24.5 percent from early January,
CISA said in a separate monthly report published on Monday.
Higher inventories have forced
mills to deliver their products to the spot market, which could suppress any
recovery in steel prices.
“We are seeing rising
inventories… flowing to the market and the recent fall in steel prices has
prompted traders to hold off making sales,” the trader added.
The most-traded May rebar contract
on the Shanghai Futures Exchange fell to a low of 4,168 yuan per tonne on Monday,
close to over 6-week low hit last Friday.
Aggregate inventories of five
major steel products rebar, heavy plate, hot-rolled coil, cold-rolled coil and
wire rod stood at around 19 million tonnes by Feb. 17, up 796,400 tonnes compared
to a year ago.
“It will be difficult for
demand to improve significantly during end February to early March, and
inventories are likely to continue rising,” CISA added.
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