Retail stocks of the five major carbon steel items held by the Chinese traders that Mysteel regularly checks accumulated moderately during the week-long National Day holiday over October 1-7, according to the results of Mysteel's latest survey.
As of October 7, the combined inventories of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate held by traders in the 132 cities Mysteel monitors had mounted by 4.5% or by 793,900 tonnes from end-September to 18.32 million tonnes, the survey results revealed.
Steady production among domestic steelmakers and fewer transactions in the quietened physical market during the break had led inventories held by both steel mills and traders to accumulate, Mysteel Global noted.
The combined output of the five steel items among the 137 Chinese steelmakers under Mysteel's coverage totaled 7.95 million tonnes over October 1-7, edging up minimally by 0.2% or 17,500 tonnes on week
Stocks of the five carbon steel products held by the sampled steel enterprises had mounted by a sharper 9.3% or 357,000 tonnes from the end of September to 4.2 million tonnes.
By product, stocks of all five products witnessed gains during the holiday, with those of HRC and rebar posting the sharpest rises by volume among the five, the survey results show.
Specifically, HRC stocks had climbed by 6.7% or 319,300 tonnes from end-September to 5.08 million tonnes as of October 7, while inventories of reinforcing bars had risen by 2.7% or 175,300 tonnes on week to 6.68 million tonnes as of the same day.
Given the high inventory pressure and weakening cost-side support, most traders are guarded about the post-holiday market, even though October is usually a peak month for China's steel sector. "If a demand recovery fails to materialize after the break, market participants are poised to lower their offer prices to clear their in-hand stocks," according to a Mysteel analyst.
Domestic finished steel prices showed mixed trends before the break, with Mysteel assessing China's national price of HRB400E 20mm dia rebar at Yuan 3,330/tonne ($497/t) including the 13% VAT on September 30, rising slightly by Yuan 7/t from September 24. In contrast, the national average price of Q235 4.75mm HRC declined by Yuan 10/t during the same period to Yuan 3,307/t including the 13% VAT, a parallel assessment shows.
Meanwhile, finished steel inventories held by traders in Mysteel's smaller sample of 35 cities also gained over the holiday break, with the tonnage totaling 11.28 million tonnes as of October 7, up by 4.6% or by 498,000 tonnes from September 30.
Source:Mysteel Global
