China steel rebar inventory draw slowed on week on greater supply

SHANGHAI, Apr 24 (SMM) – Inventories of steel rebar across Chinese steelmakers and social warehouses extended their downward trend in the week ended April 23, but the weekly decline slowed from a week ago, the first time since the slide began in mid-March, due to a rise in supply and smaller shipments from steel plants. 

On a yearly basis, overall stocks remained significantly higher, but the growth slowed down for the second consecutive week as of April 23. 

Rebar shipments from steel mills were at a slower pace this week, with most traders at break-even and cautious about drastically restocking. Steelmakers continued to increase supplies, and this adds to uncertainties about a sustained decline in the in-plants stocks at the current rate. 

Inventories at social warehouses accelerated their drops as construction demand remained brisk. The year-on-year buildup in social stocks narrowed this week, the first time since the Chinese New Year holiday, after the previous five consecutive weeks of drops in the social inventories. 

Anticipated stepped-up purchases from construction sector before the holiday of Labours Day will extend the inventory draw next week.

The upsides of spot rebar prices, however, will be capped as overall stocks remain elevated from a year earlier. 

SMM data showed that overall inventories of rebar, including stocks across steelmakers and social warehouses, stood at 15.04 million mt as of April 23, 76% higher year on year, following a buildup of 80.1% last week.

Rebar inventories at Chinese steelmakers stood at 4.54 million mt as of April 23. This was down 6.2% from April 16, slowing from a decline of 10.2% last week. 

Inventories across social warehouses shrank 6.8% on the week and stood at 10.5 million mt, after dipping 6.4% in the previous week.