Steel stocks at Chinese traders rise faster on week

Stocks of finished steel held by Chinese traders climbed for a second week over December 30-January 5, growing by a large 1.1 million tonnes on week, double the increase of 452,500 tonnes during the prior period, according to Mysteel's latest stocks survey. The faster rise in stocks was attributed to the approaching Chinese New Year holiday (over January 21-27), with steel consumption gradually coming to a standstill, sources said.

The inventories of the five major steel items among the traders Mysteel surveys in 132 cities had gained by 8% on week to 15.4 million tonnes as of January 5. The five comprise rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate.

Among the total, the stocks of rebar and wire rod still mounted the most, with the tonnage of the former leaping by 639,900 tonnes on week to 6.6 million tonnes as of Thursday, and that of rods soaring by 226,300 tonnes on week to 1.9 million tonnes as of the same day, the survey showed.

"Many local end-users have suspended their operations in advance as the holidays loom or had already replenished some quantities ahead of New Year's Day - the start of the new business year for most companies," said a market insider in South China's Guangzhou city.

Meanwhile, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel checks averaged just 102,186 tonnes/day over December 29-January 4, or 8% lower than the average in the previous week.

The inventories of finished steel products in Mysteel's former smaller sample in just 35 cities rose for the third week and at a faster pace, jumping by 7.6% or 672,900 tonnes on week to 9.6 million tonnes by January 5.

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.