WEEKLY: China mills’ steel stocks at the turning point
Among the five, stocks of hot-rolled coil (HRC) posted sharpest week-on-week decline of 12.5% to reach 1.6 million tonnes as of March 11, as some steelmakers arranged maintenance in advance to relieve some of the pressure they’re facing from high stocks in their yards and traders’ warehouses, Mysteel Global notes.
For example, Anyang Iron & Steel Group in Central China’s Henan province, idled one hot strip mill for maintenance starting from March 4 and resumed production on March 11, a production break which reduced the company’s HRC output by 11,000 tonnes/day during that period, according to Mysteel’s assessment.
During the March 5-11 period, China’s total production of the five major steel products reversed down again after output had rebounded during the prior week, losing 39,000 tonnes on week to 8.64 million tonnes, according to Mysteel’s database.
“Steel production is expected to remain low this month, as the most important thing for the moment is to reduce the bulging levels of stocks,” a Shanghai-based market watcher predicted.
Domestic steel demand improved further over the past week with more end users back to normal operations after the prolonged Chinese New Year holiday, Mysteel Global notes. For example, over 58% of construction projects nationwide including both real estate development and infrastructure projects had resumed as of March 8, as Mysteel Global reported.
This was in line with Mysteel’s survey, which showed that daily spot sales of construction steel comprising rebar, wire rod and bar-in-coil among the 237 sampled trading houses across China, recorded a three-month high of 201,068 t/d on March 11. Above 200,000 t/d is considered a normal sales level in the traditional peak season for steel consumption in Spring.
Thus, although traders’ stocks continued to grow over the March 6-12 week, the pace of the rise had slowed significantly compared with the prior week. During the week to Wednesday, total inventories of the five steel products held by traders in 35 cities across China came in at 26 million tonnes, up 2.8% on week but lower than the 6.5% week-on-week increase recorded one week earlier, according to Mysteel’s latest survey.
Written by Nancy Zheng, zhengmm@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Table 1 Five major steel products inventories at traders Unit: ‘000 tonnes
Product |
Mar 13 2020 |
WoW (%) |
Feb 14 2020 |
MoM (%) |
Mar 15 2019 |
YoY (%) |
Rebar |
14,269.5 |
3.6% |
9,954.9 |
43.3% |
9,731.4 |
46.6% |
Wire rod |
4,563.4 |
1.2% |
3,494.5 |
30.6% |
2,982.0 |
53.0% |
HR sheet |
4,129.8 |
5.6% |
2,891.4 |
42.8% |
2,653.5 |
55.6% |
CR sheet |
1,564.6 |
-2.5% |
1,255.7 |
24.6% |
1,189.1 |
31.6% |
Medium plate |
1,477.9 |
-0.9% |
1,340.3 |
10.3% |
1,263.1 |
17.0% |
Total |
26,005.2 |
2.8% |
18,936.8 |
37.3% |
17,819.1 |
45.9% |
Table 2 Five major steel products inventories at mills Unit: ‘000 tonnes
Product |
Mar 13 2020 |
WoW (%) |
Feb 14 2020 |
MoM (%) |
Mar 15 2019 |
YoY (%) |
Rebar |
7,499.4 |
-3.4% |
6,229.9 |
20.4% |
2,754.0 |
172.3% |
Wire rod |
2,044.0 |
-3.3% |
1,800.1 |
13.5% |
852.4 |
139.8% |
HR sheet |
1,618.6 |
-12.5% |
1,797.2 |
-9.9% |
997.4 |
62.3% |
CR sheet |
624.8 |
2.0% |
560.9 |
11.4% |
317.6 |
96.7% |
Medium plate |
1,117.2 |
-4.3% |
1,112.5 |
0.4% |
759.0 |
47.2% |
Total |
12,904.0 |
-4.5% |
11,500.6 |
12.2% |
5,680.4 |
127.2% |
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