SHANGHAI, May 17 (SMM) – China's inventories of rebar continued to shrink on a weekly basis as of Thursday May 16, but stood higher from a year ago as production enthusiasm across steel mills remained brisk on high profits.
SMM data showed that overall inventories, including stocks across smelters and social warehouses, shank 2.9% on the week and posted 8.13 million mt as of Thursday May 16, standing 0.7%, or 58,500 mt, higher from a year earlier.
As of May 16, inventories across social warehouses stood at 5.99 million mt, down 4.6% on the week, but up 1.8% on the year. In-plant stocks across smelters expanded 2.1% on the week, after they shrank 0.5% a week ago.
The domestic average price of rebar lost 48 yuan/mt, to stand at 4,139 yuan/mt in the week to Thursday May 16, after an increase of 7.9 yuan/mt last week. Uncertainties around US-China trade grew market pessimism and lowered prices.
Firm demand from construction in the north and costs of raw materials will underpin prices of rebar next week, SMM expects.
As of Thursday May 16, profit margins across steelmakers stood at highs of 500-600 yuan/mt, despite moderation from the previous week, SMM assessed based on seaborne iron ore prices of $95/mt.