China: Retail steel stocks mount fast on winter stocking

Over January 7-13, total stocks of the five major finished steel products at commercial warehouses in the 132 Chinese cities Mysteel tracks grew for the second week and at a faster pace, rising by 2.9% or 404,100 tonnes on week to reach 14.1 million tonnes, the regular stocks survey found. This was mainly due to ongoing winter stocking among dealers and low steel consumption, Mysteel Global noted.

During the week, inventories of rebar, wire rod, hot-rolled coil and medium plate at the surveyed trading houses posted on-week gains, while cold-rolled coil (CRC) stocks continued thinning for the 13th straight week, the survey showed.

Among them, rebar stocks increased the most, rising by 332,900 tonnes on week to a one-month high of 5.5 million tonnes, the survey data show. Stocks of wire rod gained by 39,300 tonnes on week to 2 million tonnes. In contrast, CRC stocks declined but by a small 9,400 tonnes to 1.8 million tonnes.

The 184 Chinese mills under Mysteel's tracking showed that their production of these five major steel products reached a 3.5-month high of 9.3 million tonnes over January 6-12, or up 0.8% or 70,800 tonnes on week, as more domestic mills resumed normal operations with the fulfillment of their output reduction targets for 2021.

As of January 12, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had rebounded by Yuan 25/tonne ($3.9/t) on week to Yuan 4,762/t including the 13% VAT, partly as the recent rise in production costs had propped up domestic finished steel prices.

For example, Mysteel SEADEX 62% Australian Fines gained by $7.15/dmt on week to hit a three-month high of $131.5/dmt CFR Qingdao by January 12.

By January 13, inventories of these five items under Mysteel's smaller-scale survey among trading houses in 35 Chinese cities had also climbed for the second week to 9.2 million tonnes, rising by another 3.2% or 283,000 tonnes on week.

Written by Rong Zhang, zhangronga@mysteel.com

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