SHANGHAI, Jul 12 (SMM) – China's inventories of rebar extended their increases from the previous week, with higher stocks at both social warehouses and steel mills, as a seasonal lull slowed downstream purchases, an SMM survey showed on Thursday July 11.
Torrential rainfall across southern areas disrupted the release of downstream demand, and grew rebar inventories as expected. Consumption by traders also cooled after the announcement of production curbs in the north hiked spot prices of steel and bolstered stockpiling.
This week, spot prices of rebar traded weakly except for an uptick on Tuesday July 9, driven by news about fresh, intensified production curbs in Wu’an.
Production limits lowered rebar supplies from the previous week but remained higher from a year earlier, as rebar mills unaffected by restrictions produced actively.
SMM data showed that overall inventories, including stocks across steelmakers and social warehouses, grew 2.2% on the week and posted 8.08 million mt as of Thursday July 11, after grew 0.7% in the prior week. On a yearly basis, inventories stood 23.2% higher, expanding from a growth of 15.7% last week.
As of July 11, inventories across steel plants advanced 6.8% on the week, to stand at 2.3 million mt, as speculative purchases from traders waned. In-plant stocks slid 1.9% in the previous week.
Inventories across social warehouses stood at 5.77 million mt, up 0.5% on the week, easing from a buildup of 1.8% a week ago.
SMM expects the continued impact of precipitation to keep inventories of rebar rising in the short term, but expectations of pent-up demand after the rainy season will continue to fuel bullish sentiment.