China's retail steel stocks hold largely steady on week

Retail stocks of the five major carbon steel items stockpiled in the commercial warehouses across China that Mysteel regularly monitors eased for the fourteenth consecutive week over June 12-18, but the decline had almost flattened out over the period, the results of Mysteel's latest weekly survey showed.

As of June 18, the total inventories of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate held by traders in the 132 cities under Mysteel's tracking had thinned by a tiny 0.2% or 41,100 tonnes on week to 18.51 million tonnes, the survey results showed.

One reason for the narrowing decline was the rise in finished steel output as steelmakers responded to the relatively healthy profit margins they were enjoying, Mysteel Global noted.

The combined output of the five finished steel items among the 137 Chinese steelmakers Mysteel regularly checks totaled 8.68 million tonnes over June 11-17, higher by 1.3% or 109,700 tonnes on week.

Among the five finished steel items, the stocks of rebar, wire rod, HRC and medium plate posted on-week declines, with those of HRC and rebar contributing the most to the inventory drawdown, the survey results indicated.

Specifically, HRC inventories had edged down by 0.7% or by 32,600 tonnes on week to 4.56 million tonnes as of June 18, while rebar stocks had eased by 0.2% or 14,900 tonnes on week to 7.37 million tonnes as of the same day.

Despite a modest uptick in spot transactions – driven by restocking of finished steel items ahead of China's three-day Dragon Boat Festival holiday from June 19 – overall steel demand stayed weak, Mysteel Global noted.

For instance, the combined daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses nationwide under Mysteel's tracking averaged 92,030 tonnes/day over June 11-17, recovering by just 2,314 t/d on week.

The sluggish demand saw finished steel prices decline further this week, with Mysteel assessing the national price of HRB400E 20mm dia rebar at Yuan 3,374/tonne ($498/t) including the 13% VAT on June 17, down by Yuan 14/t on week, while the average price of Q235 4.75mm HRC nationwide was lower by a small Yuan 2/t on week at Yuan 3,394/t including the 13% VAT on the same day.

Meanwhile, finished steel inventories held by traders in Mysteel's smaller sample of 35 cities also slipped slightly over the week. The same survey shows that the tonnage had amounted to 11.26 million tonnes as of June 18, down by 0.6% or by 63,500 tonnes from June 11.

Source:Mysteel Global