China's retail steel stocks fall to 8-month low

Over October 8-14, total stocks of five major finished steel products held by the Chinese trading houses under Mysteel's tracking fell to an eight-month low of 20 million tonnes, or down 5.2% or 1.1 million tonnes on week after a brief recovery in the prior week, indicating that demand picked up after the long National Day holiday over October 1-7.

As of October 14, total inventories of these five major products comprising rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate held by the surveyed traders in China's 132 cities hit a new low since February 5, and among them, all but CRC posted on-week drops with rebar down the most by 684,900 tonnes to 9.1 million tonnes.

CRC, in contrast, saw its stocks increased for the second week by 21,400 tonnes to 1.9 million tonnes as of October 14, according to Mysteel's data.

The declines were more to do with better demand, as their production in total trended upward for the second week over October 7-13, or gaining 2.1% or 189,600 tonnes to 9.1 million tonnes, according to Mysteel's data.

Higher demand saw China's finished steel prices strengthen after the holiday, as the country's national price of HRB400E 20mm dia rebar, for example, was assessed by Mysteel at Yuan 5,899/tonne ($916/t) including the 13% VAT as of October 13, down Yuan 124/t from October 8, though the fluctuation after the holiday indicated the uncertainties in the market sentiment.

As of October 14, inventories of these five steel products in Mysteel's smaller-scale survey among China's 35 cities also touched an eight-month low of 12.6 million tonnes, or having reversed down by 5.4% or 715,100 tonnes on week.

~ Written by Rong Zhang, zhangronga@mysteel.com