China mills' steel stocks fall further on increased consumption
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Stocks of the five major finished steel products held by the 184 Chinese steel mills under Mysteel's regular survey continued to thin over February 25-March 3, thanks to the further recovery in demand from end-users, though the on-week fall slowed to 0.7% against the prior week's 1.1%.
Total stocks of the five products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the surveyed mills' yards registered 9.7 million tonnes as of March 3, lower by another 70,700 tonnes from the prior week, according to Mysteel's latest weekly survey.
"More than 80% of downstream users have resumed normal production by now, leading to the significant growth in their steel consumption," a market source in Shanghai said.
For example, Mysteel's survey among the 237 trading houses across China showed that their daily trading volume of construction steel including rebar, wire rod and bar-in-coil came in at 196,876 tonnes/day on March 2, well above the average of less than 100,000 t/d over the prior week and marking the highest since January 5.
Domestic steel prices grew further over the past week on support of firm raw materials costs and expectation of better demand in the coming peak season for steel consumption over March-April, sources said. This bolstered the mills' profit margins and encouraged them to ramp up production after completing regular maintenance.
Over February 25-March 3, total production of the five major items among the surveyed mills increased for the second week to reach 10.3 million tonnes, growing at a faster pace of 2.3% compared with the on-week rise of 0.7% over the previous week.
Inventories of the five steel products at traders' warehouses mounted for the ninth consecutive week over February 26-March 4 to top 34.3 million tonnes, but the on-week growth had eased to 4.5%, down 11.9 percentage points from that for the prior week, indicating the increased consumption from end-users, the survey showed.
As of March 3, the national price of HRB 400 20mm dia rebar had grown to a 38-month high of Yuan 4,774/tonne ($738/t) including the 13% VAT, up Yuan 101/t from one week before, while that for Q235 4.75mm HRC had increased by Yuan 127/t during the same period to Yuan 4,974/t including the VAT, according to Mysteel's data.
Written by Nancy Zheng, zhengmm@mysteel.com
Table 1 Five major steel products inventories at mills (Feb 25-Mar 3)
| Product | Volume ('000 t) | WoW (%) | MoM (%) | YoY (%) |
| Rebar | 5,218.3 | 1.4% | 70.7% | -31.4% |
| Wire rod | 1,790.8 | 0.1% | 94.3% | -14.1% |
| HR sheet | 1,254.4 | -3.7% | 4.8% | -34.8% |
| CR sheet | 407.2 | -6.1% | 32.3% | -28.9% |
| Medium plate | 1,003.3 | -6.3% | 24.3% | -18.9% |
| Total | 9,674.0 | -0.7% | 53.8% | -27.9% |
Table 2 Five major steel products inventories at traders (Feb 26-Mar 4)
| Product | Volume (million t) | WoW (%) | MoM (%) | YoY (%) |
| Rebar | 18.50 | 6.6% | 117.0% | - |
| Wire rod | 6.62 | 4.1% | 115.3% | - |
| HR sheet | 4.57 | 1.9% | 56.4% | - |
| CR sheet | 1.84 | 1.2% | 20.7% | - |
| Medium plate | 2.74 | -1.3% | 37.5% | - |
| Total | 34.29 | 4.5% | 90.0% | - |
Note: Mysteel has started publishing the new set of data regarding traders' steel inventories since 19th March 2020 to better represent the market with bigger sample sizes, and the on-year comparisons will be filled up when feasible.
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.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
