Stocks of the five major finished steel products held by the 184 Chinese steel mills monitored by Mysteel reversed up over December 24-30 after sliding for three weeks, as demand from end-users slowed down with the arrival of the severe cold front across much of the country.
As of December 30, total inventories of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the surveyed mills’ yards came in at 5.24 million tonnes, higher by a significant 9.5% on week, in contrast to the on-week fall of 5.7% over the prior week, according to Mysteel’s latest weekly survey.
Among the total, inventories of rebar and wire rod posted the sharpest rises of 15.3% and 14.4% on week to 2.6 million tonnes and 657,800 tonnes respectively as of December 30, the survey showed. “Long steel consumption among construction contractors declined significantly this week as the temperatures in North and East China have fallen below zero degrees C,” a market source said.
Mysteel’s daily survey among the 237 trading houses across China showed that their daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil registered 173,312 tonnes/day over December 24-30, dropping by 32,247 t/d or 15.7% from one week before.
In parallel, speculative demand also weakened when the prices were falling, aggravating the negative sentiment in the domestic market. Many traders preferred to concede some of their margin to facilitate sales and gain more cash flow to ease the financial strain at year’s end, Mysteel Global noted.
As of December 30, China’s national price of HRB 400 20mm dia rebar, a bellwether of domestic steel-market sentiment, had slipped for the sixth working day to Yuan 4,359/tonne ($666/t) including the 13% VAT, lower by Yuan 125/t on week, according to Mysteel’s data.
After moving down for five consecutive weeks, total output of the five major steel products over December 24-30 grew slightly by 0.5% on week to reach 10.5 million tonnes – another factor market watchers cited to explain the rebound in mills’ stocks.
The steady two-month decline in finished steel stocks at traders’ warehouses in the 132 Chinese cities Mysteel checks also ended this week, with the volume up 2.6% on week at 13.1 million tonnes as of December 31, according to the survey.
Table 1 Five major steel products inventories at mills (Dec 24-30)
| Product | Volume (‘000 t) | WoW (%) | MoM (%) | YoY (%) |
| Rebar | 2,583.8 | 15.3% | 3.6% | 19.5% |
| Wire rod | 657.8 | 14.4% | 0.5% | 10.4% |
| HR sheet | 979.0 | 4.5% | 4.6% | 18.0% |
| CR sheet | 294.7 | 2.9% | -7.6% | -1.5% |
| Medium plate | 733.5 | -2.8% | -7.8% | 11.5% |
| Total | 5,248.8 | 9.5% | 0.9% | 15.5% |
Table 2 Five major steel products inventories at traders (Dec 25-31)
| Product | Volume (million t) | WoW (%) | MoM (%) | YoY (%) |
| Rebar | 5.46 | 0.3% | -14.2% | – |
| Wire rod | 1.74 | 1.0% | -7.7% | – |
| HR sheet | 2.70 | 8.1% | -6.0% | – |
| CR sheet | 1.46 | 0.0% | -6.1% | – |
| Medium plate | 1.79 | 5.7% | -4.5% | – |
| Total | 13.15 | 2.6% | -9.6% | – |
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply