Stocks of the five major carbon steel items held by the 184 steel mills that Mysteel regularly monitors across the country decreased for a sixth straight week over November 7-13, dipping by 3.8% on week to 4.4 million tonnes, a new low since late February, according to Mysteel’s latest stocks report. The five comprise rebar, wire rod, hot rolled coil, cold rolled coil, and medium plate.
Over the survey week, the mills’ stocks of rebar contracted the most among the five items, thinning by 5.2% on week to 2 million tonnes, the report showed.
The steady decline in maker inventories of the five products is a sign of firmer demand in the spot market recently, Mysteel Global notes. Stocks of the same five items held by the Chinese traders in 35 major cities that Mysteel tracks fell during November 8-14 to a new low since December 28 last year at 8.3 million tonnes, also down by a sizeable 6% on week, according to the report. The traders’ stocks too had shrunk for a sixth straight week.
Over the survey week too, the steelmakers were not working at full capacity – many having just emerged from the production restraints – and so they were under no pressure from large stocks, Mysteel Global notes.
The average operational rate of the blast furnaces owned by the 247 steelmakers Mysteel regularly surveys nationwide nudged up by 1.4 percentage points on week to 77.9% over November 8-14 as some mills in North and East China just finished the previous round of production curbs, according to Mysteel’s database. But the ops rate was still 0.5 percentage point lower than the same period last year.
Operation restrictions on steelmakers in heavily polluted cities including several in North China’s Hebei and Shanxi provinces have become the “new normal” this year, a Hebei-based insider told Mysteel Global.
“There will be more short-term emergency curtailments in the near term as air pollution is harder to dissipate in winter. The normal production of domestic blast furnaces will be subject to almost constant curtailment,” he added.
This article has been published under article exchange agreement between Mysteel Global & SteelMint Research.
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