China's rebar inventories accelerate declines on week

SHANGHAI, Sep 6 (SMM) – Declines in China's inventories of construction material rebar speeded up in the week to Thursday September 5 as losses and scrap shortage shifted EAF steelmakers into lower gear in operation and lower margins put steel mills with iron ore as feedstock into maintenance. 

Downstream purchases and speculative buying picked up this week on optimistic price outlook. Despite traffic regulations, demand from construction released steadily ahead of the anticipated suspension before National Day. 

SMM assessed the daily average price of rebar rebounded 104.9 yuan/mt from last Thursday to stand at 3,812.6 yuan/mt as of Thursday September 5. Fundamentals are expected to sustain the price rally in the short term as supply cuts continue. 

SMM data showed that rebar inventories across social warehouses stood at 5.89 million mt as of Thursday September 5, down 3.3% on the week, after a decline of 2.9% a week ago.

Inventories across steel plants shrank 8.5% on the week to stand at 2.4 million mt, compared with a 3% rise a week earlier.

Overall inventories of rebar, including stocks across steelmakers and social warehouses, slid for the fourth consecutive week, by 4.9% and posted 8.29 million mt as of Thursday September 5, accelerating from a decline of 1.2% in the prior week. On a yearly basis, inventories remained 33.5% higher