Posted on 16 Jan 2025
China's domestic demand for long steel products is forecast to drop further in January, primarily due to the seasonal winter slowdown and the near halt of construction activities ahead of the Chinese New Year break later this month, according to Mysteel's latest report.
Despite a modest improvement in project funding, Chinese contractors are hesitating to replenish long steel inventories, choosing instead to maintain the low stockpile levels they're observing currently, the report notes.
Mysteel's survey of over 190 Chinese construction companies across the country reveals that in December, their total long steel procurement reached 5.88 million tonnes for a second consecutive on-month decline. The pace of the drop had quickened by 12% on month, as against the 2.2% dip in November from October.
As for January, these companies have further reduced their planned steel purchases, with total procurement expected to fall to 4.68 million tonnes, according to the survey.
Steel procurement plans are set to decline across various regions. In Central China for example, contractors predict a 6.6% on-month drop in planned steel purchases, while the rest of China expects sharper declines of between 15% and 45%. Contractors in northeastern China are forecast to see the largest reduction of 45%.
A representative from a construction firm in Northeast China noted that local long steel demand is at a standstill due to the frigid temperatures that are severely limiting outdoor building activity. Meanwhile, a source in South China reported that projects in the region are winding down as workers begin leaving jobsites early for the holiday break.
Most domestic construction firms remain cautious and seem uncertain about future market trends, the survey findings show. As a result, they are purchasing steel only as needed, rather than actively building up stocks. The report found that the majority the total surveyed companies – some 120 firms – are maintaining low inventory levels.
So far this month, the spot trading volume of long steel products (rebar, wire rod, and bar-in-coil) among the 237 commercial warehouses tracked by Mysteel nationwide averaged just 89,027 tonnes/day. This represents a sharp drop of 21.7% or 24,728 t/d from the corresponding period last month.
Source:Mysteel Global
