SHANGHAI, Jun 21 (SMM) – China's inventories of rebar continued to grow this week, but at slower paces, as firm demand from railroad construction in north-west China offset weaker demand in the south amid the rainy season. A surge in prices of iron ore also eased market pessimism and spurred trades of rebar.
SMM data showed that overall inventories, including stocks across steelmakers and social warehouses, grew 1.4% on the week and posted 7.9 million mt as of Thursday June 20, slowing from an increase of 2.6% in the prior week. On a yearly basis, inventories stood 16.2% higher, the same growth rate as last week.
As of June 20, inventories across steel plants expanded 2.1% on the week, to stand at 2.32 million mt, after a prior buildup of 4.4%. Stocks across social warehouses stood at 5.58 million mt, up 1% on the week and up 16.8% on the year.
Major steelmakers kept normal operation and reported stable orders this week, while some medium-sized and small producers with scrap as feedstock cut production on shrinking profits or losses.
Key steel producers in the east traded under long-term contracts, which ensured stable shipment of rebar from plants even as the average price of the product extended decline, by 58.1 yuan/mt on the week, to 3,953.3 yuan/mt.