SHANGHAI, Nov 18 (SMM) – The prices of rebar futures and spot cargoes moved rangebound this week. On the supply side, the profit of some steel mills in east China has rebounded, and the production enthusiasm has increased slightly. However, due to the production losses, high inventory pressure on factories and environmental protection restrictions, steel mills in the north-west and south-west have experienced large-scale production reductions. The overall rebar output has declined 4.3% compared with the previous month. The demand side performance is relatively poor, basically the same as last week. Inventories of rebar across Chinese steelmakers and social warehouses stood at 7.268 million mt as of November 18, down 373,600 mt or 4.9% from a week earlier. The stocks are up 43.1,900 mt or 6.3% from a year earlier.
The rebar inventories at Chinese steelmakers reduced 86,900 mt or 3.0% from a week earlier. And the stocks are 435,200 mt or 18.4% higher than the same period last year. The spot prices has fallen sharply recently. Traders have been more cautious in restocking cargoes. The in-plant inventory has continued to accumulate. The decline has slowed this week. The east China market has seen a large decrease in the inventory of mills. Some steel mills have operated under capacity due to poor sales. Transactions in south China improved as the traders have increased their purchasing enthusiasm, lowering the in-plant inventory. The demand in north-east China was poor, and the inventory at mills increased. In-plant inventory in north China fell slightly due to the sharp drop in the output in Shanxi and Hebei.
The decline in spot prices slowed down slightly this week. The merchants actively shipped goods, and the decline in social stocks was noticeable. Although the spot cargoes in central China is already at a relatively low level in China, the demand is weaker and the decline in social stocks is relatively small. The decline in east China was the largest, and merchants in mainstream cities reported that downstream dip buyers purchased actively, tightening the supply and the specifications of cargoes. Sellers in north China sold off cargoes and the social inventories decreased sharply. Transactions in south China picked up slightly as end-users restocked actively. The social inventory decreased slightly. The inventories at social warehouses declined 286,700 mt or 6.03% on the week and stood at 4.47 million mt, down 3,300 mt or 0.1% from a year ago.
The rebar output declined slightly this week. The market bearish sentiment has not been effectively eased. The supply has been declining for four consecutive weeks. Recently, environmental protection in north China has been tightened, and output may shrink again. Traders in many places have reported that market resources are tight and inventory is low. The demand changed little, and the speculative traders were cautious. The end-users purchased on demand. The overall supply decreased, and the inventory may continue the downward trend.
