Home / Metal News / China steel rebar inventory continued to decline, hitting 6.5 million mt amid wet season

China steel rebar inventory continued to decline, hitting 6.5 million mt amid wet season

iconNov 26, 2020 17:30
Source:SMM
China steel rebar inventories continued to fall this week as most areas in Northeast China, North China, and Northwest China were under heavy snow and heavy rain. East China was also in rainy weather. The construction progress of the construction site has been dragged down, and the turning point of overall demand has officially arrived.

SHANGHAI, Nov 26 (SMM) – China steel rebar inventories continued to fall this week as most areas in Northeast China, North China and Northwest China are facing bad weather, with heavy snowfall and rainfall. On the other hand, East China was also having rainy weather. The construction progress of the construction site has been dragged down, and the turning point of overall demand has officially arrived.

Inventories of rebar across Chinese steelmakers and social warehouses stood at 6.5 million mt as of November 26, down 5% from a week ago and up 42.9% from a year earlier. The rate of reduction narrowed 4.5 percentage points.

According to SMM data, inventories at Chinese steelmakers rose 206,000 mt on the week and stood at 2.39 million mt, up 0.9% from a week ago and up 26.7% from a year ago.

Stocks have piled up for the first time since September (excluding National Day data). Initially, the market sentiment improved in early November, when steel mills concentrated on maintenance with the quality inspection in Jiangsu and Zhejiang provinces, and rebar prices soared. However, the market fear of high prices continued to ferment, and the willingness for restocking gradually weakened.

Especially under the resurgence of COVID-19 and weather factors, rebar plunged 100 points after opening of this week. The national average price dropped 99.1 yuan/mt in four days, and East China and other places even dropped nearly 200 yuan. Merchants were unwilling to restock, and transportation was disrupted amid bad weather, resulting in a sharp drop in the shipments of in-plant stocks.

Inventories at social warehouses fell 359,500 mt on the week and stood at 4.11 million mt, down 8% from a week ago and 54.3% higher from a year ago.

Social inventories slowed by 3.7 percentage points this week due to the weakening end-user demand. However, the sharp drop in prices has lifted shipments of the market and has intensified the panic sentiment of selling goods in the market. Some merchants have accelerated the pace of delivery to the construction site, thus accelerating the efficiency of rebar transportation from the social warehouse to the end-users. This also accounted for stocks decline maintaining high speed after the slowdown.

The seasonal weakening of current demand has arrived as scheduled, and the slowdown of long steel inventories have officially started to slow down sharply. The overall situation of rebar fundamental weakening has been settled, and prices have officially entered the downward range. However, considering that the steel demand still exists, and the demand will be high next week-the rainy weather in East China will disperse, social stocks will continue to decline. Spot prices will remain stable in the near term.

Inventory data
Rebar

For queries, please contact Michael Jiang at michaeljiang@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news

SMM Events & Webinars

All