Posted on 08 Dec 2023
Inventories of finished steel products at the trading warehouses across China tracked by Mysteel declined by a further 169,500 tonnes on week during December 1-7, the results of the latest weekly survey show. Behind the continuous fall in stocks was mainly the fact that many end-users are rushing to fulfill orders before year's end, while traders are cautious and keen to lower their inventories at hand, sources said.
The stocks of the five major steel items held by traders in the 132 cities Mysteel monitors decreased for the ninth successive week this week, shrinking by another 1.1% on week to 14.7 million tonnes as of December 7. The five items comprise rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate.
Among the five, HRC still saw sharpest drop in stocks, with the volume thinning by 141,100 tonnes on week to 3.7 million tonnes by Thursday, indicating that consumption in the manufacturing sector remains smooth. Meanwhile, rebar stocks fell by another 6,200 tonnes during the same period to 5.4 million tonnes.
On the other hand, some domestic mills also trimmed steel production during the week, which contributed partly to the decline in stocks, Mysteel data shows. Over November 30-December 6, output of the five steel items among the 184 Chinese steel producers Mysteel follows declined by 1.4% or 126,330 tonnes on week to 9.1 million tonnes and ended a three-week rise.
Meanwhile, spot sales of construction steel comprising rebar, wire rod and bar-in-coil among the 237 traders under Mysteel's tracking recovered by 5.7% on week to reach 147,476 tonnes/day during November 30-December 6.
"Steel prices have climbed to reach relatively high levels, and we are still waiting for a good time to replenish inventories," said a Beijing-based trader.
In addition, steel stocks held by traders in Mysteel's former smaller sample across just 35 cities have continued falling for nine weeks, with the total as of December 7 being lower by another 1.4% or 127,200 tonnes on week at 8.8 million tonnes.
Source:Kallanish
