Chinese steel traders' stocks drop 2.8% on week
The total inventories of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at trading warehouses in the 132 cities Mysteel monitors nationwide thinned by another 797,100 tonnes on week to 27.4 million tonnes as of March 28, the data showed.
During the latest survey period, rebar continued to witness the sharpest fall in stocks among the five items, as its volume was down 505,300 tonnes on week to 13.5 million tonnes, a drop accounting for 63.4% of the total decline. Second to rebar in terms of stock decline was wire rod – another long steel product – whose stocks shed 216,800 tonnes on week to 3.7 million tonnes.
"There are two main reasons for the thinning in steel stocks in our province: one is local steelmakers' further scaling back of production, which slowed down the buildup in steel inventories, the other is that these steel mills stepped up their deliveries of steel products to the market outside the province," said a source based in Southeast China's Fujian province.
In addition, domestic steel prices softened again last week, reflecting the sour market sentiment and weak support from production costs, Mysteel Global notes.
As of March 27, the country's national price of HRB400E 20mm dia rebar under Mysteel's assessment had lost by Yuan 59/tonne ($8.2/t) on week to Yuan 3,653/t and including the 13% VAT. Meanwhile, Mysteel SEADEX 62% Australian Fines for iron ore dwindled by $5.4/dmt to $101.25/dmt CFR Qingdao over the same period.
Steel inventories held by traders in Mysteel's smaller sample across just 35 Chinese cities also slipped for the third week, lower by 2.5% or 420,100 tonnes on week to 16.7 million tonnes by Thursday.
Written by Rong Zhang, zhangronga@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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