Chinese traders saw their stocks at hand decline further over December 4-10, falling by another 841,200 tonnes on week, as against the 626,700 tonnes on-week drop in the prior period. Mysteel Global notes that long steel sales have been picking up slightly, buoyed by the uptick in futures prices.
Inventories of the five major steel products the traders held declined for the ninth week last week, losing a further 5.8% on week to 13.7 million tonnes as of December 10, Mysteel’s latest stocks survey showed. The five products comprise rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate.
Among the five, rebar and HRC witnessed comparatively sharper declines in stocks, with the former’s inventories down 405,200 tonnes on week to nearly 6 million tonnes as of December 10. HRC stocks had dropped by 247,400 tonnes on week to 2.6 million tonnes as of the same day, the survey showed.
Market sources attributed the revival in rebar demand to the remarkable rise in futures prices flowing from the strong raw materials prices. The trading volume of construction steel including rebar strengthened by 13% on week to average 220,340 tonnes/day over December 3-9, Mysteel’s survey among 237 traders showed.
The price of the most traded rebar futures contract on the Shanghai Futures Exchange for January had surged Yuan 245/t from the settlement price one week earlier to close at Yuan 4,040/t when daytime trading session ended on December 12.
“In the near future, we may still stock up a bit of tonnage for the winter when prices soften moderately, though the prices this year must be higher than last year,” a Shanghai-based trader said. “That’s because the overall expectation for steel demand and prices next year is positive,” he added.
On the other hand, HRC demand has kept robust amid steady domestic demand from end-user industries such as the auto, machinery and home appliance manufacturing industries, Mysteel Global noted. The sustained strong demand from exports has also helped the digestion of steel stocks.
In the meantime, steel inventories held by traders in Mysteel’s former smaller sample across just 35 cities declined further last week, losing 614,100 tonnes or 6.5% on week to 8.8 million tonnes as of December 10. This compares with the decline of 5% on week as of December 3, though the total was still 18.9% higher on year.
Written by Anna Wu, wub@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Photo: World Steel Association
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