China’s steel stocks at traders reach turning point
Source: Mysteel
Mar 19, 2020 17:40
The same trend emerged in the findings of a new survey from Mysteel commencing March 19 which tracks traders’ steel inventories in a larger sample of 132 cities to better reflect market conditions. The new data shows that steel stocks in trading warehouses in the 132 cities also moved down by 996,700 tonnes on week to 38.1 million tonnes over the same period.
The on-week declines were mainly thanks to strengthening trading among traders and rising demand from end-users, Mysteel Global noted.
Over March 16-18, the daily trading volume of construction steel including rebar, wire rod and bar-in-coil among 237 traders handling these items under Mysteel’s survey increased by an average of 32,414 tonnes/day or by about 19% on week to 200,857 t/d on average.
“In the prior week, the rises in trading mainly reflected in-warehouse transactions concluded among traders or orders from end-users yet to take delivery. This week, trading among traders remained active and the pace of ex-warehouse dispatch basically returned to normal levels,” an official with a trading company in East China’s Zhejiang province stated.
Traders’ sentiment is rather positive now, not only because of better demand, but also thanks to the robust trend of rebar futures prices, according to him. The futures market has gained strong support from the enhanced investments scheduled for the country’s infrastructure projects.
“Whether the potential rises in steel demand in the future will meet market expectations or not, no one knows. But for now, the stimulus is still shoring up sentiment for rebar futures amid the overall gloomy financial market,” he added.
The most traded rebar contract on the Shanghai Futures Exchange for May started showing signs of moving upward over the week of March 9-13, Mysteel Global notes. Since then, the closing price fluctuated high at a level of Yuan 3,520-3,560/tonne ($498-504/t) to reach Yuan 3,528/t on March 19, gaining a total Yuan 89/t from the that on March 9.
Mysteel’s national average price for HRB400 20mm dia rebar also moved up by Yuan 94/t from March 9 to reach Yuan 3,677/t including the 13% VAT as of March 18.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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