Posted on 19 May 2023
Total inventories of the five major carbon steel items held by the 184 Chinese steel mills under Mysteel's regular survey continued to empty during May 11-17 to reach 5.11 million tonnes, down for the second week by another 5.7% on week.
The five major steel products comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate. During the survey period, stocks of all five steel items decreased by varying degrees, the survey findings showed.
Chinese steel producers maintained a fast pace of delivery during the survey period. Meanwhile, the continuous decrease in steel production and the steady demand for steel from users also contributed to the further decrease in mills' inventories, Mysteel Global learned.
Production of the five steel products moved down for the fifth consecutive week to 9.18 million tonnes over May 11-17, while the on-week fall slowed to 0.5% as against the previous week's 1.9%, according to the survey.
"Some steel mills resumed operations this week as they could gain some profit, thanks to the reduction in their production costs with the lower prices of steelmaking raw materials," a market source in Shanghai said.
Over May 11-17, 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 tracking registered 165,904 tonnes/day on average, down 6,810 t/d from the prior week.
However, demand from end-users was not as poor as the market had expected, easing the negative sentiment in the domestic steel market and lending some support to domestic steel prices, Mysteel Global noted.
As of May 17, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 3,825/tonne ($544/t) including the 13% VAT, down Yuan 24/t from one week ago, but higher by Yuan 34/t from last Friday.
Over May 12-18, inventories of the five finished steel products at traders' warehouses in the 132 cities nationwide under Mysteel's regular tracking posted a slightly sharper decrease of 4.1% on week to 19.57 million tonnes, compared with the on-week fall of 3.8% over the previous week, the survey showed.
Source:Mysteel Global
