China steel rebar inventory increased as wet season impact lingered

SHANGHAI, Aug 14 (SMM) – Inventories of steel rebar across Chinese steelmakers and social warehouses stood at 11.15 million mt as of Aug 13, up 0.8% from a week ago and 25.3% from a year earlier. Inventories of steel rebar failed to extend their downward trend but piled up this week.

Spot rebar prices fluctuated range-bound this week as curbed demand, high inventories, unstable macroeconomic environment and cautious market sentiment pressured the prices, while firm production costs gave strong support.

Inventories at Chinese steelmakers rose 94,300 mt on the week and stood at 3.48 million mt, up 2.8% from a week ago and 34.8% year on year.

Inventories at Chinese steelmakers rose sharply this week. The wet season slowed release of end-user demand and cargo shipments from steelmakers to social warehouses. Many end-users and traders had restocked actively last week, reducing demand for this week. In addition, weak performance of rebar futures, social financing data that missed expectations and tensions between the US and China weakened trades.

Output at steel mills rebounded. An SMM survey found that operating rates of EAFs stood at 81.88% this week, up 4.24 percentage points from the previous week as some EAF mills recovered from maintenance. And some blast furnace mills have also recovered recently.

Inventories across social warehouses shrank 2,300 mt on the week and stood at 7.68 million mt, remained largely unchanged from a week ago and up 21.5% year on year.

Inventories across social warehouses were relatively stable this week, with an increase of 0.7 percentage point year on year. Cargoes shipped out of social warehouses shrank as end-users mostly purchased as required amid the wet weather, while shipments from steelmakers also fell.