Steel stocks at China's traders down but at a lower speed

Inventories of the five major steel items held by Chinese traders decreased for the eighth successive week over November 27-December 3, slipping by another 626,700 tonnes on week, according to Mysteel's latest survey. But the decline narrowed further from the on-week fall of 742,300 tonnes over the prior survey period, as long steel demand in northern areas weakened while orders for flat steel still performed well.

The stocks of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate in traders' warehouses in the 132 cities across China Mysteel monitors declined 4.1% on week to 14.5 million tonnes as of December 3, the survey showed, with the pace of the decline slowing by 0.6 percentage point from the prior week.

As of December 2, the stocks of rebar had declined the most among the five, shrinking by 338,800 tonnes or 5.1% on week to 6.4 million tonnes. Second to rebar was HRC, whose stocks dropped 153,200 tonnes or 5.1% on week to 2.9 million tonnes, the survey showed.

"Local construction-steel demand has obviously softened as the weather has gotten colder, but so far, flat steel demand has remained firm as that market is less affected by weather conditions," an official with a steelmaker in Tangshan in North China's Hebei province said.

However, another official with a steelmaker in East China's Shandong province told Mysteel Global that local long-steel demand there showed nearly no impact from the low temperatures of late, but that more products are available in the local retail market.

Long steel demand overall stayed stable from the previous week, as the trading volume of construction steel items comprising rebar, wire rod and bar-in-coil averaged 194,908 tonnes/day over November 26-December 2, up by 4.1% on week, according to Mysteel's survey among 237 traders across the country.

In the meantime, steel inventories held by traders in Mysteel's former smaller sample across just 35 cities declined further but also at a slower pace, slipping by 501,700 tonnes or 5% on week to 9.5 million tonnes as of December 3, though still 23.7% higher on year. The on-week decline was 0.6 percentage point slower than that over November 20-26.

Written by Anna Wu, wub@mysteel.com

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

Photo: World Steel