WEEKLY: China mills’ steel stocks down for 3rd week

Source：MysteelSep 10, 2021 09:00

\ ABSTRACT:

Stocks of the five major finished steel products at the 184 Chinese steel mills sampled under Mysteel’s weekly survey declined for the third week over September 2-8, mainly thanks to the gradual recovery in demand from end-users.

• Total inventories of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate came in at 5.95 million tonnes as of September 8, posting a sharper decline of 4.1% on week over September 2-8 – as against the tiny on-week dip of 0.1% over the prior week – and hitting a 14-week low, the survey showed.
• Among the total, stocks of hot-rolled coil and rebar saw the largest on-week falls in percentage terms of 7.2% and 5.6% respectively, as demand from end-users improved gradually with the arrival of pleasant weather. September-October are traditionally China’s peak months for steel consumption.
• Transactions in the physical market also witnessed significant improvement. Over September 2-8, the spot trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 traders Mysteel monitors averaged 224,005 tonnes/day, jumping by 27,171 t/d or 13.8% on week and higher than the 200,000 t/d average regarded as normal for the peak season.
• Total output of the five major steel products among the 184 surveyed mills resumed trending downwards again over September 2-8 after the prior week’s rise, easing 0.1% on week to 10.15 million tonnes. The higher prevalence of mill stoppages for maintenance in response to the on-going production curbs was blamed.
• As for the inventories of the five steel items at the commercial warehouses Mysteel monitors in 132 cities, the volume declined for the sixth week over September 3-9 to reach 22.6 million tonnes, down 1.8% on week, as against the prior on-week fall of 0.6%, indicating the improvement in demand.
• Chinese domestic steel prices have increased somewhat, reflecting the improved demand and expectations for lower output. As of September 8, the national price of HRB400E 20mm dia rebar under Mysteel’s assessment reached Yuan 5,412/tonne ($837/t) including the 13% VAT, up Yuan 105/t on week though it was lower by Yuan 7/t on day.

Table 1 Five major steel products stocks at mills (Sept 2-8)

Table 2 Five major steel products stocks at traders (Sept 3-9)

• 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.