China Mills' Steel Stocks Dip More, Sales Active

Stocks of the five major finished steel products held by the 184 steelmakers across China which Mysteel monitors were digested faster over the April 9-15 week, thanks to active transactions in the spot market, with the tonnage totalling 8.57 million tonnes, according to Mysteel's latest weekly survey. The stocks had declined by 9.3% on week, as against with the prior week's 7.5%, to refresh the lowest record since February.

The five major products tracked are rebar, wire rod, hot rolled coil, cold rolled coil and medium plate. Among the total, stocks of rebar and wire rod posted the sharpest week-on-week decreases of 11.9% and 11.5% to 4.59 million tonnes and 1.23 million tonnes respectively, the survey showed.

Stocks at traders' warehouses also slid more quickly over the April 10-16 period, with the total tonnage of the five items held by traders in 132 cities countrywide reaching 31.8 million tonnes as of April 16. The latest week-on-week decline of 5.7% was 1.5 percentage points faster than the previous week, mainly thanks to strong demand from downstream buyers, Mysteel Global notes.

Domestic spot sales of long steel remained firm over the April 10-16 week, with the average trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 sampled trading houses across China reaching 234,660 tonnes/day, staying above the threshold of 200,000 t/d though sales declined by 5.7% on week, according to Mysteel's data.

"Transactions in the spot market kept active last week, adding to the positive sentiment in the domestic market," a market source in Shanghai commented.

Chinese steel production grew steadily over the April 9-15 period and almost returned to the level prior to the outbreak of COVID-19, with total production of the five major steel items rallying for a fifth consecutive week to a three-month high of 10.12 million tonnes, up another 3% on week, Mysteel's survey showed.

Domestic steel prices saw some recovery too over the past week. As of April 16, the national price of HRB 400 20mm dia rebar, for example, gained Yuan 32/tonne ($4.5/t) on week to reach Yuan 3,632/t including the 13% VAT, according to Mysteel's database.

However, for the time being steel prices in the domestic market are still unstable, and most traders are in no hurry to stock up more products when expectations for China's steel market are unclear, Mysteel Global learned.

Table 1 Five major steel products inventories at mills Unit: '000 tonnes

Table 2 Five major steel products inventories at traders (April 10-16)

Note: Mysteel has started publishing the new set of data regarding traders' steel inventories starting March 19 to better reflect the market situation with bigger sample sizes, as explained in the previous data update. Month-on-month and year-on-year comparisons will be filled up on later dates when they are available.

Rebar and wire rod: Sample size is now 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.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.