China mills' steel stocks ease, demand steady

Stocks of the five major finished steel products held by the 184 Chinese steel mills Mysteel regularly canvasses emptied for the fourth straight week over September 17-23, thinning by another 0.5% on week to 6.63 million tonnes, mainly thanks to the largely steady demand from steel users and the reduction in output among mills, according to Mysteel’s latest weekly survey.

The five major items comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate. Among the total, stocks of rebar and medium plate declined by 1.1% and 3.1% respectively on week, while those of other three products increased by varying degrees during the period.

“Some construction contractors returned to the market to rebuild product inventory in preparation for continuing work during the upcoming long holiday over October 1-8 (the National Day holiday) and this has eased the stocks pressure on rebars to some extent,” a market source in Shanghai commented.

Mysteel’s daily survey among 237 trading houses across China showed that their daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil also recovered a little over September 17-23, rising by 3,512 tonnes/day on week to average 221,767 t/d.

Over September 17-23, total production of the five steel products among the surveyed steelmakers reversed down again after their one-week rebound, losing 0.5% on week to 10.92 million tonnes, Mysteel’s weekly survey showed, though the output of rebar witnessed a week-on-week rise of 1% to reach 3.76 million tonnes.

Inventories of the five major steel products at sampled commercial warehouses in 132 Chinese cities also slid further for a third consecutive week to 22.6 million tonnes over September 18-24, down another 1.1% from one week before, according to the survey.

However, domestic steel prices were still under pressure as demand from end-users in September, the peak season for steel consumption in China, has so far fallen short of market expectations, and the declines in steel stocks held by both steelmakers and traders have been slower than anticipated.

For example, China’s national price of HRB 400 20mm dia rebar, an indicator of domestic steel market vitality, continued trending downward, undermined by the negative sentiment in the domestic steel market. The price fell by another Yuan 42/tonne ($6.2/t) on week to Yuan 3,764/t including the 13% VAT as of September 23, the lowest since July 8, according to Mysteel’s database.

Source : Mysteel Global