The inventories of finished steel products held at traders’ warehouses throughout China decreased for the third week over May 21-27, declining by 2.9% on week, new Mysteel data shows. But the pace of the decline in stocks had slowed further from the 4.3% on-week decline in the prior period, prompting concerns among market insiders that the downtrend in stocks may not last much longer.
Total inventories of the five major steel items held by traders in 132 cities across the country thinned by 640,600 tonnes on week to 21.6 million tonnes as of May 27, according to Mysteel’s latest stocks survey. The five products are rebar, wire rod, hot-rolled coil, cold-rolled coil (CRC) and medium plate.
Among the five items, stocks of CRC and medium plate saw rises during the week, climbing by 20,800 tonnes and 67,300 tonnes on week to reach 1.9 million tonnes and 2.3 million tonnes respectively over the period, the survey found.
“The approaching rainy season and the high temperatures that follow will affect steel demand to some extent, while in the meantime, the semiconductor shortage has dampened steel use in the automobile and home appliance sectors,” a Shanghai-based analyst said.
Moreover, the factors that had propped up steel prices in earlier this year such as the likely decline in steel production cannot support prices anymore, he noted. “For the current situation, expectation alone is not enough to drive up prices unless Beijing introduces practical measures to effectively curb steel production,” he explained.
The daily trading volume of rebar, wire rod and bar-in-coil among 237 traders in China monitored by Mysteel averaged 181,124 tonnes/day over May 20-26, still below the pre-holiday average of above 200,000 t/d though up 11% on week.
Stocks of the five major steel products in Mysteel’s smaller-scale survey among the commercial warehouses in 35 cities also declined by 452,300 tonnes on week to 14.1 million tonnes as of May 27.
Written by Anna Wu, wub@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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