Steel inventories at Chinese mills fall to 5.5-month low

Inventories of five major carbon steel products at Chinese steel mills surveyed by Mysteel fell in the period from July 11 to 17, after recording a slight increase the previous week, to 4.16 million tonnes – down 2.4% week-on-week and hitting their lowest level since late January.

The five steel products include rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate. During the survey period, inventories of most of the five products fell to varying degrees, except for a 1% week-on-week increase in medium plate, the results showed.

Mysteel attributed the decline in mill inventories to a continued decline in finished steel output at sampled steelmakers this week, albeit only slightly.

During July 10-16, the total output of five major steel products among the sampled mills reached 8.68 million tonnes, down 0.5% for the second week from the previous week.

Some domestic steel mills in China are maintaining relatively low capacity as demand from end users remains generally sluggish amid a hot summer and frequent rains.

Inventories of five major steel products held by Chinese traders rose slightly during the survey week due to weak overall demand, with total volumes at warehouses in 132 Chinese cities tracked by Mysteel reaching 15.02 million tonnes as of July 17, up 0.9% from the previous week, according to the survey.

Mysteel noted that finished steel trading in the physical market remained low as end users were more cautious in placing new orders after market sentiment cooled this week.

During July 10-16, the daily trading volume of construction steel including rebar, wire rod and coil among 237 trading firms nationwide regularly tracked by Mysteel averaged 99,161 tonnes/day, still low despite an increase of 2,397 tonnes/day from the previous week.

Finished steel prices in China have shown signs of fluctuation this week, with the national average price of 20mm diameter HRB400E rebar at 3,281 yuan/mt ($457/mt), including 13% VAT, as of July 16, according to Mysteel. Although this price is 39 yuan/mt higher than last week, it has fallen 14 yuan/mt from the recent high on July 11.

Source: Mysteel