Posted on 24 Feb 2023
The further recovery in demand led inventories of the five major carbon steel products held by the 184 Chinese steel mills under Mysteel's regular survey to reverse down by 4.1% on week over February 16-22 to 6.86 million tonnes, ending the continuous rally witnessed over the prior six weeks.
During the survey period, stocks of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate among the sampled steel mills decreased by varying degrees, with the tonnage of rebar posting the sharpest on-week fall of 153,300 tonnes.
The retreat in mill stocks occurred partly because of a steady improvement in domestic steel demand, as more end-users reopened for business following the Chinese New Year break and returned to the market for procurement to meet their demand, Mysteel Global learned.
Mysteel's other weekly survey checking the status of some 12,220 construction projects nationwide showed that as of February 21, about 86% of them had resumed operation, up by 9.6 percentage points from one week before.
Meanwhile, speculative demand also improved this week with the higher expectations for steel consumption in the coming term.
Over February 16-22, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's regular survey reached 174,383 tonnes/day on average, representing a significant rise of 56,971 t/d or 48.5% from the prior week.
Domestic steel output continued to pickup over February 16-22, with the total production of the five major steel items among the surveyed steel mills climbing for the fifth consecutive week by another 1.7% on week to 9.32 million tonnes, the highest since late December 2022, according to the survey.
Chinese steel prices in both the physical and futures markets strengthened this week with the positive sentiment in the domestic market. As of February 22, China's national price of HRB400E 20mm dia rebar had increased for six working days to reach Yuan 4,341/tonne ($630/t) including the 13% VAT, up Yuan 90/t on week and marking the highest since July 4 2022.
On Wednesday, the most-traded rebar contract on the Shanghai Futures Exchange for May delivery also climbed for the sixth working day to close the daytime trading session at Yuan 4,237/t, higher by Yuan 176/t from the settlement price on February 15.
Meanwhile, after mounting for the past two months inventories of the five steel items at commercial warehouses in the 132 Chinese cities under Mysteel's regular survey also peaked over February 17-23 to decline by 0.6% on week to 26.26 million tonnes, the survey showed.
Source:Mysteel Global
