China steel rebar inventory posted faster decline despite rising supply

SHANGHAI, May 15 (SMM) – Inventories of steel rebar across Chinese steelmakers and social warehouses accelerated their declines in the week ended May 14 as deliveries improved in various regions after the Labour Day holiday. 

The drop in rebar stocks at steel mills continued to outpace that of social inventories, even as production expanded further amid profits. Downstream consumers stepped up restocking after the holiday and cautious sentiment prompted steelmakers to speed up the transfer of inventories from plants to social warehouses. 

SMM survey showed that the operating rates of blast furnaces in China added 2 percentage points from a month ago as of May 11. Planned output of rebar across China’s major blast furnace steelmakers in May rose 15.2% from the planned production in April to 9.16 million mt, pointing to steel mills strong willingness to supply the market. 

Robust prices of rebar futures also bolstered downstream purchases. This sustained a steady decline in rebar social inventories this week despite elevated supply. 

Under mounting supply pressure, steel mills are expected to maintain its great amount of shipments to social warehouses, and this could slow the decline in social stocks next week, SMM forecasts. 

According to SMM data, rebar inventories across social warehouses stood at 8.51 million mt as of May 14. This was down 7.6% from May 7, compared to a 5.7% decline last week. 

Inventories at Chinese steelmakers shrank 11.3% on the week and stood at 3.39 million mt, the tenth consecutive week of decline, after dipping 7.7% in the previous week. 

Overall inventories of rebar, including stocks across steelmakers and social warehouses, fell 8.7% and posted 11.9 million mt as of May 14, after a decline of 6.3% in the prior week.
On a yearly basis, overall inventories were 46.4% higher as of May 14, following a buildup of 55.7% last week.