SHANGHAI, Jul 13 (SMM) – Rebar prices soared in the last two days but few purchases downstream limited upward room. Prices climbed after inventories shrank on a fresh round of cuts in Tangshan.
The spot rebar price gained 53.9 yuan/mt from Wednesday and averaged 4,130.5 yuan/mt as of Thursday July 12, SMM assessed.
Social and in-plant inventories of rebar across China fell on the week ended July 12, and marked two straight weeks of decline. Overall inventories shrank to 6.55 million mt as of Thursday, down 4% week on week, SMM data showed. The decline exceeded the drop of 1.8% in the previous week.
Social inventories stood at 4.63 million mt as of July 12, down 2.8% from a week ago, in line with SMM's expectations. Downstream demand grew as operations picked up at construction sites after the rainy season, and this accounted for the lower inventory. Traders were also keener to destock as prices rebounded.
Stocks across steel mills registered 1.93 million mt as of Thursday, down 6.9% from a week earlier and down 24.1% from last year. Production fell in early July as the suspension at Xuzhou steel mills extended and more mills undertook maintenance.
Steelmakers were also eager to sell cargos as profits declined. Rebar earnings dipped 268 yuan/mt at plants, from a high of 1,028 yuan/mt in mid-June, to 760 yuan/mt at the start of July, SMM learned.