China mills' steel stocks reverse up again
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Stocks of the five major finished steel products at the 184 Chinese steelmakers Mysteel surveys weekly resumed climbing over August 6-12, reflecting higher output and slowing procurement from end users, Mysteel Global learned.
As of August 12, total inventories at the surveyed steel mills were at 6.8 million tonnes, reversing up 3.7% on week after the short-lived decline over the prior week, according to Mysteel's latest weekly survey. The tonnage was 26% higher compared with the same period last year.
"Many domestic steel mills ramped up production after completing maintenance, because for the time being they could still earn some profits," a market source in Shanghai said.
The five major steel products comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate. Over August 6-12, production of the five increased to varying degrees, taking the total production to a six-week high of 11 million tonnes from week-on-week growth of 0.7%.
However, steel consumption among end-users shrank during that period when high temperatures affected most regions but especially in South and East China after the wet season, Mysteel Global notes. Heavy rain also fell in North China including Beijing and Hebei.
Mysteel's daily survey among the 237 trading houses across China showed that the daily trading volume of construction steel including rebar, wire rod and bar-in-coil registered 211,857 tonnes/day over August 6-12, lower by 18,566 t/d or 8.1% from one week earlier.
Chinese steel traders also slowed down their pace of replenishment after noting the shrinking demand from end-users and the weakness of steel prices.
Therefore, inventories of the five major products at commercial warehouses in the 132 cities continued to empty over August 7-13, declining by another 1% on week to 22.6 million tonnes, Mysteel's other survey showed.
China's national price of HRB 400 20mm dia rebar, an indicator of domestic steel market sentiment, softened continuously after hitting a 7.5-month high of Yuan 3,865/tonne ($557/t) on August 6. As of August 12, the price had lost a total of Yuan 27/t to reach Yuan 3,838/t including the 13% VAT, according to Mysteel's data.
Table 1 Five major steel products inventories at mills (Aug 6-12)
| Product | Volume ('000 t) | WoW (%) | MoM (%) | YoY (%) |
| Rebar | 3,632.2 | 4% | 9.9% | 38.4% |
| Wire rod | 739.1 | 1% | 4.8% | 5.3% |
| HR sheet | 1,169.8 | 4.4% | 8.5% | 18% |
| CR sheet | 334.7 | 1.1% | 0.7% | 14.2% |
| Medium plate | 904.4 | 5% | 5.7% | 17.1% |
| Total | 6,780.2 | 3.7% | 8% | 26% |
Table 2 Five major steel products inventories at traders (Aug 7-13)
| Product | Volume (million t) | WoW (%) | MoM (%) | YoY (%) |
| Rebar | 12.16 | -0.3% | 0.7% | - |
| Wire rod | 3.39 | -1.8% | -7% | - |
| HR sheet | 3.41 | -2.4% | -0.9% | - |
| CR sheet | 1.71 | -1.2% | -2.9% | - |
| Medium plate | 1.91 | -0.9% | 1.9% | - |
| Total | 22.59 | -1% | -0.9% | - |
Note: Mysteel has started publishing the new set of data regarding traders' steel inventories since March 19 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.
Photo: World Steel
