With only two weeks left until the Chinese New Year holiday, which will start on February 10, finished steel stocks in warehouses across China increased for the sixth week between January 19-25, as steel users went into holiday mode.
Stocks of rebar, wire rod, hot rolled coil, cold rolled coil and medium plate of traders in 132 cities across the country increased by 797,700 tons in the week as of January 25, reaching 17.4 million tons, the highest level in three months.
Among the five steel categories, rebar and wire rod inventories recorded the most significant increases. Rebar stocks increased by 521,500 tons weekly to 7.6 million tons, and wire rod stocks increased by 179,200 tons weekly to 2.2 million tons.
The large retail stock increase was driven by the decline in construction steel trade volume and weak demand during the winter months. Steel consumption decreased by 18.5% or 22,175 tonnes/day on the week to an average of 97,447 tonnes/day.
The weakness of steel production and demand in China has been affected by macroeconomic factors and steel producers' production costs. However, the slight improvement in market sentiment in local steel prices and the recovery in raw material prices are seen as signs of strength in the sector.
As of January 24, the country's national HRB400E 20 mm diameter rebar price increased by 11 Yuan/ton ($1.5/ton) weekly to 4,036 Yuan/ton including 13% VAT. During the same period, iron ore prices also increased, reaching $135.95/dmt CFR Qingdao, with a weekly increase of $9.25/dmt.
Comments
No comment yet.