Slower decline in rebar inventories grows market pessimism 

SHANGHAI, Mar 29 (SMM) – China's inventories of rebar across social warehouses and steel mills continued to shrink in the week ended Thursday March 28, the seventh week after CNY, but overall decline on the week was slower than the same post-CNY period in 2018, and this depressed market sentiment. 

Compared with a lunar year ago, the drop in domestic rebar inventories may slow further in the weeks ahead. Supply is set to grow after restrictions are lifted at the end of March.  

Prices of rebar will also face heavy pressure next month as a lower VAT lower costs in spot rebar, SMM expects. 

As of Thursday March 28, average prices of spot rebar increased by 8.3 yuan/mt week on week, to 3,971.2 yuan/mt, compared with an increase of 51.2 yuan/mt last week. 

SMM data showed that overall inventories, including social and in-plant stocks, shrank to 11.11 million mt as of Thursday March 28, down 611,000 mt on the week, compared with a drop of 1.04 million mt during the same period a lunar year earlier. 

In the seventh week after 2018's CNY, a release of pent-up demand, previously affected by lower prices of steel and political sessions, accounted for the sharp decline in inventories. 

As of March 28, inventories across steel mills stood at 2.45 million mt, down 3.4% from a week ago and down 25% from a lunar year ago. Social stocks also declined by 5.2% on the week and by 3.1% on the year to stand at 8.67 million mt as of March 28