ACCOUNT PROFILE

Slower decline in China mills’ steel stocks

Posted on 06 September 2021

Stocks of the five major finished steel products at the 184 Chinese steel mills sampled under Mysteel’s weekly survey continued declining over August 26-September 1, but the on-week fall had slowed to just 0.1% against the prior week’s 2.6% slide, due to the still weak demand from end-users.

 

Inventories of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate totalled 6.2 million tonnes as of September 1, edging down 8,000 tonnes on week, according to the survey.

Among the total, stocks of rebar rose by 2.2% on week to 3.4 million tonnes during August 26-September 1, while those for the other four items declined to varying degrees, the survey showed.

“The recovery in domestic steel demand is proving slower than the market had expected, though consumption among end-users has been better than that in mid-August,” a market source in Shanghai said.

Over August 26-September 1, the spot trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 traders Mysteel monitors averaged 196,834 tonnes/day, down 5,481 t/d or 2.7% on week.

Chinese steel prices in the physical market were rangebound over the past week due to the unstable demand from end-users. As of September 1, the national price of HRB400E 20mm dia rebar under Mysteel’s assessment registered Yuan 5,307/tonne ($822/t) including the 13% VAT, up Yuan 8/t on week but lower by Yuan 11/t on day.

Sentiment in the domestic steel market also softened with the lackluster demand, even though China has just entered the traditional peak season for steel consumption called “gold September, silver October”, Mysteel Global noted.

On September 1, the most-traded rebar contract on Shanghai Futures Exchange for January 2022 delivery closed the daytime trading session at Yuan 5,242/t, losing Yuan 92/t from the settlement price on the prior day.

Total output of the five major steel products among the 184 surveyed mills reversed up slightly over August 26-September 1 after sliding for two weeks, gaining 0.3% on week to 10.16 million tonnes.

As for the inventories of the five steel items at the commercial warehouses Mysteel monitors in 132 cities, the volume emptied for the fifth consecutive week over August 27-September 2 to a nine-week low of 23 million tonnes, down another 0.6% on week, the survey showed.

Table 1 Five major steel products stocks at mills (Aug 26-Sept 1)

Product

Volume ('000 t)

WoW (%)

MoM (%)

YoY (%)

Rebar

3,404.4

2.2%

1.1%

-7.2%

Wire rod

807.4

-2.5%

-19.4%

19.3%

HR sheet

920.2

-4.6%

-4.9%

-23.5%

CR sheet

316.9

-2.0%

-7.7%

3.2%

Medium plate

762.7

-1.1%

-5.7%

-16.8%

Total

6,211.6

-0.1%

-4.3%

-8.3%

 

Table 2 Five major steel products stocks at traders (Aug 27-Sept 2)

Product

Volume (million t)

WoW (%)

MoM (%)

YoY (%)

Rebar

11.33

-1.0%

-3.2%

-9.9%

Wire rod

3.36

3.2%

5.4%

-0.3%

HR sheet

4.10

-1.7%

-0.9%

16.5%

CR sheet

1.84

-0.4%

-0.8%

10.9%

Medium plate

2.37

-1.8%

-2.6%

25.0%

Total

23.00

-0.6%

-1.4%

-0.1%

 

Note: Mysteel has started publishing the new set of data regarding traders’ steel inventories since March 19 2020 to better represent the market with bigger sample sizes.

Rebar and wire rod: Sample size is increased to 429 warehouses in 132 Chinese cities from the previous 215 warehouses in 35 cities.

Hot-rolled coil (HRC): Sample size is increased to 194 warehouses in 55 cities from the previous 138 warehouses in 33 cities.

Cold-rolled coil (CRC): Sample size is increased to 182 warehouses in 29 cities from the previous 134 warehouses in 26 cities.

Medium plate: Sample size is increased to 217 warehouses in 65 cities from the previous 132 warehouses in 31 cities.

Source : Mysteel Global