Posted on 11 Aug 2023
Inventories of the five major carbon steel items held by the 184 Chinese steel mills under Mysteel's regular survey continued to swell over August 3-9 due to the thin demand, with the total volume rising for the second week by another 4% on week to 4.55 million tonnes.
The five major steel products comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate, and during the survey period, the stocks of all five increased by varying degrees, the findings show. However, those of wire rod and rebar posted the sharpest on-week rises of 6% and 4.3% respectively.
Poor demand from end-users was one major reason for the further accumulation in mills' steel inventories, as end-users were inactive in placing new orders when steel prices were moving down, and speculative demand was also tepid this week, Mysteel Global noted.
Over August 3-9, 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 133,318 tonnes/day on average, still a very low level though trading had increased by an average of 2,087 t/d or 1.6% from the prior week.
China's finished steel prices weakened continuously this week, reflecting the sluggish demand. As of August 9, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 3,780/tonne ($524/t) including the 13% VAT, softening for the ninth consecutive working day and lower by Yuan 92/t from one week before.
The most-traded rebar contract on the Shanghai Futures Exchange for delivery in October closed the daytime trading session at Yuan 3,835/t on Wednesday, lower by Yuan 135/t from the settlement price on August 2, indicating that domestic market sentiment had cooled under the pressure of weak demand.
Over August 3-9, total output of the five major steel products among the sampled steelmakers came in at 9.3 million tonnes, reversing up by 0.1% on week after the decrease over the prior two weeks.
Inventories of the five finished steel items at traders' warehouses in the 132 cities nationwide under Mysteel's regular survey continued rising during August 4-10 to reach 19.5 million tonnes, climbing for the seventh straight week by another 1.5% on week, the findings showed.
Source:Mysteel Global
