Inventories of the five major carbon steel products held by the Chinese steel mills sampled in Mysteel's regular survey witnessed a significant rise due to muted trading during the Chinese New Year (CNY) holiday, with the total tonnage surging by 27.4% from February 12 to reach 5.3 million tonnes on February 23.
The five major steel items comprise rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil and medium plate. During the latest survey period, inventories of all the five major steel items increased by varying degrees amid the quiet market.
Transactions of finished steel in the physical market came to a standstill as traders and end-users left the market to enjoy the holiday, resulting in the fast accumulation in steel inventories held by both steel mills and traders, Mysteel Global noted.
During February 13-23, total inventories of the five major steel products at traders' warehouses in the 132 Chinese cities monitored by Mysteel came in at 19.85 million tonnes, seeing a rapid growth of 15.3% from February 12, the survey results showed.
Although most Chinese electric-arc-furnace (EAF) steelmakers suspended production during the CNY holiday due to plummeting end-user demand, many blast furnace (BF) steel mills maintained normal production, leading to a recovery in China's finished steel output.
Mysteel's latest survey showed that over February 12-18, total production of the five major steel items among the sampled mills registered 8.05 million tonnes, up 1.4% on week after the continuous fall over the prior two weeks.
China's finished steel prices remained stable overall during the CNY break amid the quiet spot market. Some market participants are expecting a recovery in domestic steel prices after the long holiday, driven by a gradual recovery in demand from end-users and the approaching traditional peak season for steel consumption in March-April, when most regions of the country enjoy pleasant weather.
Source:Mysteel Global
