Stocks of the five major finished steel products held by the 184 Chinese steel mills under Mysteel’s regular survey grew by a sharp 46.1% over February 4-17, according to Mysteel’s latest weekly survey. Inventories swelled because consumption among end-users stagnated during the Chinese New Year (CNY) holiday over February 11-17 while steelmakers continued to produce during the break.
Total stocks of the five products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the surveyed mills’ yards had climbed steadily since the start of January to reach 9.9 million tonnes as of February 17. Among the total, inventories of wire rod and rebar posted the largest rises, jumping by 79.9% and 51.5% respectively over the survey period, the data showed.
China’s finished steel production continued to decrease over the CNY break as mills stepped up maintenance on their production lines, a market source in Shanghai explained. Nonetheless, the output reduction was limited, as more electric-arc-furnace (EAF) mills and re-rollers halted production over the CNY break, but most blast-furnace (BF) mills maintained normal production during that period.
Over February 4-17, weekly production of the five major steel items among the surveyed mills averaged 10 million tonnes per week, down by another 0.9% compared with that over January 28-February 3. The decrease was also 0.9 percentage point lower from the prior survey period, according to the survey.
Total inventories of the five products at traders’ warehouses in the 132 cities Mysteel checks also posted substantial growth of 32.1% over the February 5-17 period to reach 28.2 million tonnes in the quiet market, the survey showed.
However, market participants are optimistic about China’s steel market in the coming term. “Domestic steel demand may recover soon when end-users return to work gradually after the break. This is because many employees chose to celebrate the festival in the cities they are residing in, instead of travelling back to their hometowns,” the Shanghai-based source said.
Domestic steel prices had been hovering high during the CNY holiday and grew significantly after the break, mainly thanks to the better expectations for demand in the coming term and from the support of higher raw materials costs, despite the halt in spot steel trading, Mysteel Global noted.
On February 18, the first working day after the CNY holiday, China’s national price of HRB 400 20mm dia rebar was at Yuan 4,478/tonne ($694/t) including the 13% VAT, jumping by Yuan 120/t from that on February 10, according to Mysteel’s data. That of Q235 4.75mm HRC saw a larger rise of Yuan 145/t during the same period to Yuan 4,661/t including the VAT.
Source : https://www.mysteel.net/article