Posted on 22 Sep 2023
Inventories of the five major finished steel products held by Chinese traders checked by Mysteel decreased for a third straight week during September 15-21 to touch a two-month low, the latest weekly survey showed. However, market sentiment was still comparatively downbeat, survey respondents observed.
Total inventories of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate among traders in the 132 cities nationwide under Mysteel's tracking fell by another 2.1% or 383,400 tonnes on week to 18.3 million tonnes as of Thursday, the survey findings showed.
Rebar and wire rod were still the two items witnessing the sharpest on-week declines in stocks among the five, shedding 340,700 tonnes and 67,900 tonnes respectively on week to 7.6 million tonnes and 2 million tonnes as of September 21, both hitting eight-month lows.
The decline in stocks occurred mainly thanks to stable steel sales in the spot market, with the daily trading volume of rebar, wire rod and bar-in-coil among 237 trading houses across the country tracked by Mysteel rising by 5.4% on week to average 150,301 tonnes/day over September 14-20.
Nonetheless, the transaction volume was still well below the threshold of 200,000 t/d regarded as the normal level for this time of year when consumption is generally robust, Mysteel Global notes.
The outlook for China's near-term steel market appears gloomy. The most-traded rebar contract on the Shanghai Futures Exchange for January 2024 delivery slumped for the second trading day on September 21, down Yuan 77/tonne ($10.5/t) or 2% from the previous day's settlement price to close at Yuan 3,762/t when the daytime trading session ended.
On the other hand, a source based in Southeast China's Fujian province told Mysteel Global that many traders felt no destocking pressure and that they were about to stock up products ahead of the country's Mid-Autumn Festival and National Day holidays over September 29-October 6.
Meanwhile, steel inventories held by traders in Mysteel's former smaller sample across just 35 cities, thinned by 2.4% or 280,800 tonnes on week to 11.2 million tonnes as of September 21, hitting a three-month low after six weeks of falls.
Source:Mysteel Global
