China retail steel stocks fall after 2-week rise

Chinese traders saw their finished steel stocks at hand decline by 1.4% on week over December 9-15 after the prior two weeks of gains, according to Mysteel's stocks survey. The dip was mainly underpinned by the faster pace of work on some domestic infrastructure projects as year-end approaches, sources said.

Inventories of the five major steel products held by traders lost 194,600 tonnes on week to reach an 11-month low of 13.9 million tonnes as of December 15, Mysteel's data found. The five products comprise rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate.

"Long steel demand from our local end-users is relatively firm as they need to speed up construction in some key projects, with the Chinese New Year holiday (January 21-27) drawing near," said a market source in Southeast China's Fujian province.

During the survey period, all five items registered on-week drops in their stocks. Among them, medium plate posted the largest weekly decline of 45,400 tonnes to sit at 1.9 million tonnes by December 15. HRC stocks also fell 43,700 tonnes on week to 2.8 million tonnes, according to the survey.

Meanwhile, better demand saw the daily trading volume of construction steel including rebar among the 237 Chinese trading houses under Mysteel's tracking surge by some 25,190 tonnes/day or 18.8% on week to average 159,394 t/d over December 8-14.

On the other hand, "currently, some market participants are fretting about the high spot prices of steel and are adopting a wait-and-see attitude," a Shanghai-based analyst said.

As of December 14, China's national price of HRB400E 20mm dia rebar, for example, hit a near two-month high of Yuan 4,059/tonne ($582/t) including the 13% VAT, or climbing by Yuan 102/t on week, according to Mysteel's assessment.

In the meantime, steel inventories held by traders in Mysteel's former smaller sample across just 35 cities also decreased, with the total volume down 0.9% or 77,300 tonnes on week to 8.5 million tonnes by December 15.

Written by Rong Zhang, zhangronga@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.