SHANGHAI, Mar 13 (SMM) – Inventories of construction steel rebar at Chinese steel mills declined on a weekly basis as of March 12, the first time since the Chinese New Year holiday, as steelmakers stepped up deliveries to social warehouses and downstream demand accelerated recovery, showed the latest SMM survey. 

Rebar stocks at social warehouses, meanwhile, extended increase this week but the growth continued to slow from a week earlier. Consumption recovered as construction work moved up a gear. The rate of resumption of construction work in Zhejiang has climbed to 50-60%, SMM learned, and spot sellers reported improved trades in the recent week. 

Despite a turning point in in-plant rebar inventories, inventory pressure remained significant in the market, given higher overall stocks compared with a year ago and potential buildup of invisible stocks. 

Due to shortage of storage capacity, some new arrivals have been unable to enter warehouses and are thus not reflected in social inventories. 

Planned output of rebar across China’s major blast furnace steelmakers in March rebounded 2.11% from the actual production in February, as the impact from coronavirus faded with downstream demand in steady recovery, showed an SMM survey. Increases in both demand and supply will likely keep spot rebar prices hovering weakly in the near term.

According to SMM data, rebar inventories at Chinese steelmakers stood at 7.55 million mt as of March 12. This was down 2.1% from March 5, compared to a 2.9% rise last week. 

Inventories across social warehouses advanced 5.1% on the week and stood at 13.92 million mt, with the rise slowing from a buildup of 7.1% in the previous week.

Overall inventories of rebar, including stocks across steelmakers and social warehouses, increased 2.5% and posted 21.47 million mt as of March 12, after an increase of 5.5% in the prior week. 

On a yearly basis, overall inventories were 83.1% higher as of March 12, following a buildup of 67.8% last week.