Steel stocks among Chinese traders declined further and faster over May 15-21 as demand from end-users stayed robust, market sources said on Thursday. The convening of the “Two Sessions” political meetings in Beijing is also shoring up market sentiment.
The inventories of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate among traders in 132 cities sampled by Mysteel nationwide declined to 24.5 MnT as of May 21, lower by 5.6% on week, as against the 4.8% on-week decrease in the prior period, Mysteel’s latest stocks survey released on Thursday showed.
As of May 21, rebar stocks at those surveyed traders fell by 846,900 MT or 6.5% on week to 12.2 MnT, while those of wire rod declined by 396,700 MT or 8.1% on week to 4.5 MnT, the survey results showed.
The decline occurred against the background of continuously rising production among the 137 long steel makers monitored by Mysteel, whose output rose by a further 102,500 MT or 2.7% on week to 3.9 MnT over May 14-20, a historical high since 2015 when Mysteel first launched the survey.
“Recently, actual demand has been steady as many building contractors have been speeding up the pace of work while the weather is still suitable for construction,” a North China-based steel trader said.
The continuing robust demand has also been reflected in the rise in rebar prices, with China’s national price of HRB 400 20mm dia rebar assessed by Mysteel being up Yuan 124/MT ($17.5/MT) or 3.4% on week at Yuan 3,805/MT including the 13% VAT as of May 20.
However, market concerns are surfacing about the rapid uptick in prices. “Though demand has been staying strong lately, prices have been increasing much faster than expected. Maybe the holding of the ‘two sessions’ meetings has significantly shored up market sentiment,” another Shanghai-based steel trader said.
The top two political sessions start on May 21 and May 22, and many industries including steel are expecting more economic stimulus measures to be announced by Beijing to offset the impact of the COVID-19 onslaught, as reported.
Steel inventories at traders in Mysteel’s former smaller sample across just 35 cities slipped further by 932,500 MT or 5.5% on week to 16.2 MnT over May 15-21 – though they were still some 44% higher on year.
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