Steel inventories at Chinese mills rise slightly

Inventories of five major carbon steel products at Chinese steel mills sampled in Mysteel's regular survey increased slightly from July 4 to 10, with the total tonnage up 0.4% week-on-week to 4.26 million tonnes.

The five steel products include rebar, coil, hot-rolled coil (HRC), cold-rolled coil (CRC), and plate. The survey results showed that inventories of four of the above products increased slightly from the previous week, while HRC inventories decreased 0.7% week-on-week.

Market sentiment weakened due to thin demand from end users during the low season in summer. Mysteel noted that many steel users were not active in placing new orders during the week as high temperatures and frequent heavy rains in most parts of the country affected outdoor construction activities.

Trading in the spot market slowed down this week, with daily trading volume of construction steel including rebar, wire rod and coil at 237 trading houses nationwide under Mysteel’s regular monitoring averaging 96,764 mt/day during the period from July 3 to 9, down 10,057 mt/day or 9.4% from the previous week.

Weak demand has caused China’s finished steel prices to show signs of decline recently. On July 9, Mysteel assessed the national average price of 20mm diameter HRB400E rebar, an indicator of domestic steel market sentiment, at 3,242 yuan/mt ($452/mt) including 13% VAT, up 14 yuan/mt from a week earlier despite a decline of 21 yuan/mt from the recent high on July 4.

Meanwhile, according to Mysteel, the national average price of 4.75mm Q235 HRC rose 9 yuan/mt from the previous week to 3,253 yuan/mt including VAT on July 9.

However, the increase in total steel inventories at mills this week was limited, mainly due to their reduced output. During the period from July 3 to 9, the total output of five major steel products at sampled steel mills reached 8.73 million tons, down 1.4% week-on-week and ending the three-week streak of continuous increases.

The results showed that the inventories of five major steel products at warehouses in 132 Chinese cities monitored by Mysteel continued to decline during the period from July 4 to 10, down to 14.89 million tons, down slightly by 0.3% week-on-week after a slight increase in the previous week.

Note:

• Steel inventories at Chinese mills include rebar inventories at 137 mills, coil inventories at 92 mills, HRC inventories at 37 mills, CRC inventories at 29 mills, and medium plate inventories at 37 mills.
• Mysteel has started publishing a new set of data on steel inventories of traders since March 19, 2020 to better reflect the market with a larger sample size:
• Rebar and coil: The sample size is increased to 429 warehouses in 132 Chinese cities from 215 warehouses in 35 cities previously.
• Hot-rolled coil (HRC): The sample size is increased to 194 warehouses in 55 cities from 138 warehouses in 33 cities previously.
• Cold Rolled Coil (CRC): Sample size increased to 182 warehouses in 29 cities from 134 warehouses in 26 cities previously.
• Steel Plate: Sample size increased to 217 warehouses in 65 cities from 132 warehouses in 31 cities previously.

Source: Mysteel