Posted on 18 Aug 2023
Inventories of the five major carbon steel items held by the 184 Chinese steel mills under Mysteel's regular survey declined during August 10-16 to sit at 4.5 million tonnes, easing by 1.1% on week and ending the climb of the previous two weeks.
Among the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate, the stocks of four inched down on week by varying degrees except those of cold-rolled coil, the findings showed.
Behind the on-week decline was the uptick in steel transactions in the physical market, thanks to the improved sentiment during the week, sources noted.
On the macro-economic front, the People's Bank of China on August 15 had announced a cut in its key interest rate for the second time in three months as a stimulus measure, which had lifted overall sentiment in the country's steel market.
Specifically, by August 15 China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had finally gained some upward momentum after 12 working days of declines, rising by an albeit tiny Yuan 1/tonne ($0.14/t) on day to reach Yuan 3,745/t including the 13% VAT.
More crucially, on the same day, the spot sales of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's tracking had recovered by a sizzling 36.4% on day to reach 188,411 t/d.
Indeed, over August 10-16 the daily trading volume of construction steel averaged 153,294 t/d, jumping by 19,976 t/d or 15% from the prior week, according to Mytseel's tracking.
In parallel, Mysteel's latest survey found that more Chinese steel producers are planning to reduce their steel output in the near term, in line with the government policy of keeping their crude steel output this year at or below their 2022 totals, as reported. This also contributed to expectations of a market improvement, sources noted.
In the derivatives market, the most-traded rebar contract on the Shanghai Futures Exchange for October delivery closed the daytime trading session at Yuan 3,726/t on August 17, higher by Yuan 38/t from the settlement price on August 10.
During August 11-17, inventories of the five finished steel items at traders' warehouses in the 132 cities nationwide under Mysteel's regular survey also declined by 0.6% on-week to 19.4 million tonnes, as against the rises over the prior seven weeks, the findings showed.
Source:Mysteel Global
