SHANGHAI, Oct 25 (SMM) – Inventories of construction steel rebar at steelmakers in China again accumulated this week, pushed up by weakened consumption amid lower temperatures in the north, according to an SMM survey.
But overall stocks across steel mills and social warehouses extended decline, despite at a slower pace, on the back of resilient demand in a peak construction season.
High production enthusiasm and looser environmental restrictions were also the drivers behind elevated inventories at steel plants.
Previous output controls in major steelmaking areas of Tangshan, Linfen, and Shandong limitedly impacted rebar supply due to the short time period and relaxed restrictions. This intensified bearish prospects about prices and triggered selloff at traders, creating a continued decline in social warehouses.
SMM sees slower declines in rebar social inventories in the weeks ahead as a looming slack season will further depress consumption in north China.
Buildup of stockpiles at steel mills will also be closely monitored as restocking for winter is about to begin.
SMM data showed that rebar inventories across social warehouses stood at 3.97 million mt as of Thursday October 24, down 8% from October 17, after the stocks fell 11.2% last week. Inventories across steel plants advanced 0.9% on the week to stand at 2.5 million mt, following a 1.8% drop in the previous week.
Overall inventories of rebar, including stocks across steelmakers and social warehouses, slid 4.7% and posted 6.47 million mt as of October 24, slowing from a decline of 8% in the prior week.
On a yearly basis, overall inventories remained 17.8% higher as of October 24.