Inventories of the five major carbon steel products held by the Chinese steel mills Mysteel regularly surveys swelled again during the period of July 31-August 6, with the total volume mounting by 2.1% on week to reach 4.54 million tonnes and reversing the previous week’s 1.3% fall.
The five major steel items comprise rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate. Contributing mainly to the higher stocks were those of rebar and wire rod, with their inventories rising by 3.2% and 10.8% on week respectively. Those of HRC, CRC and medium plate declined by varying degrees during the same period, the findings showed.
The rise in stocks came as mills found it increasingly hard to offload their construction steel inventories onto traders during the summer lull in demand.
The inventory overhang during the survey week, together with their broad margin losses on sales, prompted mills to continue bridling their production over July 30-August 5, with total output of the five major steel products among the sampled makers sliding by 1.5% on week to 8.06 million tonnes.
The slight reduction in output failed to reverse the overall decline in China's finished steel prices, however, as the 1.5% dip was deemed too mild to correct the current supply-demand imbalance.
On August 5, Mysteel assessed the national price of HRB400E 20mm dia rebar at Yuan 3,214/tonne ($476/t) including the 13% VAT, down by Yuan 45/t on week. On the same day, the average price of Q235 4.75mm HRC nationwide under Mysteel's assessment slipped by Yuan 53/t on week to Yuan 3,248/t including the 13% VAT.
Meanwhile, inventories of the five steel products held by Chinese traders also increased over July 31-August 6, with the total tonnage stocked in traders' warehouses in the 132 Chinese cities under Mysteel's tracking sitting at 19.5 million tonnes, rising for a third week by 0.8% on week, according to the survey.
Source:Mysteel Global