Chinese steel traders' stocks fall more slowly

Chinese steel traders saw their inventories of finished steel products decrease for the third straight week over March 18-24, falling by 239,600 tonnes on week, according to Mysteel's latest stocks survey. This was slower than the decline of 412,000 tonnes in the prior week.

The total stocks held by traders in the 132 Chinese cities Mysteel checks thinned by 0.9% on week to 26.6 million tonnes as of March 24, the survey data showed. Stocks of rebar and medium plate fell the most among the five major steel products, slipping by 56,800 tonnes and 54,700 tonnes respectively on week to 13.5 million tonnes and 2.3 million tonnes.

The other three major steel items are wire rod, hot-rolled and cold-rolled coil.

"The adverse weather conditions and the new wave of COVID-19 cases nationwide have led demand from end-users to slacken and the pace of destocking to slow," a Zhejiang-based trader in East China said.

For example, over March 17-23, the daily trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 trading warehouses Mysteel monitors averaged just 148,540 tonnes/day, down 27,997 t/d or 15.9% on week. The volume was also significantly lower than the average of 206,011 t/d for the same period of last year, Mysteel Global noted.

As of March 23, China's national HRB400E 20mm dia rebar price under Mysteel's assessment had risen by Yuan 57/tonne ($9/t) on week to Yuan 4,965/t including the 13% VAT. In the meantime, many domestic traders hold a cautious stance regarding the strengthening steel prices, sources said.

Total inventories of finished steel products in Mysteel's former smaller sample across the 35 cities nationwide also thinned further over March 18-24, declining by 149,800 tonnes or 0.9% during the period to 17.1 million tonnes by March 24.

Written by Rong Zhang, zhangronga@mysteel.com

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