China mills’ steel stocks climb by another 2.1%
Date: 2020-09-07
China mills’ steel stocks climb by another 2.1%
Stocks of the five major finished steel products at the 184 Chinese steelmakers the surveys weekly continued to swell over August 20-26, due to the slowing demand from end-users, with the tonnage growing for the third week by another 2.1% on week to about 7 million tonnes.
The five major items comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate. Steel production has stayed at a relatively high level recently given that the mills are still enjoying reasonable margins, while domestic traders have slowed their pace of stocking and have adopted a wait-and-see stance, given the moderate demand from end-users, a market source in Shanghai said. The mills’ inventories have mounted as a result, he told media.
Over August 20-26, total production of the five major steel products among the surveyed steelmakers reached 10.91 million tonnes, almost the same level from one week earlier, or recording an increase of 4.7% on year, the survey showed.
Chinese steel demand remained tepid over the past week. The survey among the 237 trading houses across China showed that daily trading volume of construction steel including rebar, wire rod and bar-in-coil registered 208,831 tonnes/day on average over August 20-26, lower by 9,675 t/d or 4.3% from one week ago.
Therefore, inventories of the five major steel products at commercial warehouses in 132 cities grew for the second week to 22.8 million tonnes over August 21-27. The on-week rise widened to 0.5% against the prior week’s 0.2%, another the survey showed.
Market participants expect demand from end-users to improve in the upcoming peak season for steel consumption as weather become comfortably cool in most regions across China. However, the high stocks held by both Chinese steelmakers and traders have dampened domestic steel prices a little.
For example, China’s national price of HRB 400 20mm dia rebar, an indicator of domestic steel market sentiment, had weakened to Yuan 3,831/tonne ($556/t) including the 13% VAT as of August 26, sliding by Yuan 20/t on week.
Post time: Sep-07-2020
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