Posted on 04 Aug 2023
Inventories of the five major steel items held by traders across China under Mysteel's regular tracking continued their steady rise over July 28-August 3, mounting for the sixth straight week by 2.1% on week, the latest survey showed. Responsible for the further rise was mainly the fact that actual demand stayed poor due to the impact of extreme weather events in parts of the country, sources said.
The stocks of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate among traders in 132 cities across the country canvassed by Mysteel gained by 394,300 tonnes on week to a more than two-month high of 19.2 million tonnes as of August 3, according to the data.
Among the five, stocks of rebar and HRC witnessed the sharpest on-week growth – 214,600 tonnes and 131,800 tonnes respectively – to reach 8.7 million tonnes and 4.1 million tonnes as of Thursday.
Tepid spot trading was blamed for the accumulation of stocks. "Steel sales have been lackluster lately, and I believe the weakness in steel futures prices has also dented market sentiment and led many traders to sit on the fence rather than conclude deals," a Shanghai-based source said.
For example, the most-traded rebar contract on the Shanghai Futures Exchange for October delivery slumped for a second trading day on Thursday, dropping by Yuan 107/tonne ($14.9/t) from the prior day's settlement price to close the daytime session at Yuan 3,728/t.
Torrential rains had hit some regions of China such as North China's Beijing and Hebei, which caused work on construction sites there to be suspended. The daily trading volume of rebar, wire rod and bar-in-coil among the 237 traders Mysteel follows nationwide decreased by 18% or 28,829 tonnes/day on week to an average of 131,231 t/d over July 27-August 2.
Meanwhile, steel inventories held by traders in Mysteel's former smaller sample across just 35 cities also grew for the sixth week, rising by 2.1% on week to a two-month high of 12.1 million tonnes by August 3.
Source:Mysteel Global
