Posted on 25 Oct 2024
The steady fall in finished steel inventories held by Chinese traders in 132 cities sampled in Mysteel's survey continued during October 18-24, thinning by another 295,000 tonnes on week, according to the latest weekly release. However, the pace at which the stocks were leaving the traders' warehouses had slowed, Mysteel Global notes, given that in the previous week the on-week drop had been a large 526,700 tonnes.
Industry watchers mainly attributed the slower destocking to tepid spot trading activity last week as market optimism faded moderately and demand throughout the country waned, especially in northern regions where winter has now arrived. A source also cited higher production among steelmakers for the slower destocking.
Total inventories of the five key carbon steel products comprising rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate in the trading warehouses declined for the third straight week, dipping by around 2% on week to 14.6 million tonnes as of October 24.
The five major items except rebar registered on-week declines in their inventories, the survey results showed. Among these, HRC stocks declined the most, falling by 188,400 tonnes on week to 4.2 million tonnes by Thursday. In contrast, rebar stocks grew modestly by 34,900 tonnes during the same period to 4.5 million tonnes.
"In tandem with the continuous softening of rebar futures prices, spot trading activities have become less brisk recently," said a market insider in Southeast China's Fujian province, adding that some local mini-mills had also resumed production, leading steel supplies to the market to pick up.
He expected traders' stocks in the province to mount further next week as steel production would be largely stable while demand was unlikely to keep pace.
Production of the five steel items among the 184 Chinese steelmakers Mysteel checks grew for the sixth straight week during October 17-23, inching higher by 0.8% or 71,600 tonnes on week to 8.8 million tonnes, a three-month high. Within the total, rebar output swelled by 2.9% or 70,800 tonnes to 2.5 million tonnes over the same period, hitting a new high for the year.
During October 17-23, the spot trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel follows nationwide averaged a mere 112,420 tonnes/day, lower by 8.4% on week.
As of October 24, finished steel stocks held by traders in Mysteel's smaller sample across just 35 cities slid by 3.2% or 279,300 tonnes on week to 8.48 million tonnes.
Source:Mysteel Global
