SHANGHAI, Nov 22 (SMM) – Inventories of construction steel rebar in China shrank from a year ago for the first time in the second half of this year so far, an SMM survey showed on November 21.
The stocks also registered a sixth straight week of decline as of November 21, on the back of strong downstream demand amid overall warmer weather than the previous years.
Steel consumption in north China has yet to show a significant decline, with demand releasing steadily in the south as construction sites stepped up operation before the Chinese New Year holiday.
Anti-smog measures were reactivated in several areas, including Tangshan, Handan, Lvliang, Tianjin, and Zibo, which rallies market sentiment about prices and boosted spot trades.
SMM assessments indicated that spot prices of rebar have climbed 195 yuan/mt in the week ended Thursday November 21.
Meanwhile, some traders kept from stockpiling as they remained pessimistic about prices on the expectations of greater supply. This deterred the transferring of inventories from steel mills to social warehouses.
Large volumes of cargoes remained en route as weather issues continued to affect the north-to-south steel shipments, even as the blockage at ports eased.
SMM sees limited downside room in near-term rebar prices as supply shortage will remain in place before arrivals of cargoes from the north. Stepped-up operation at electrical arc furnace (EAF) steelmakers will only limitedly contribute to the overall steel supply.
According to SMM data, rebar inventories at steelmakers stood at 1.91 million mt as of Thursday November 21, down 7.2% from November 14, faster than a drop of 4.7% last week.
Inventories across social warehouses declined 10.2% on the week to stand at 2.72 million mt, following a 9.1% drop in the previous week.
Overall inventories of rebar, including stocks across steelmakers and social warehouses, slid 9% and posted 4.63 million mt as of November 21, accelerating from a decline of 7.3% in the prior week.
On a yearly basis, overall inventories were 8.4% lower as of November 21.
