SHANGHAI, Sep 4 (SMM) — Inventories of steel rebar across Chinese steelmakers and social warehouses declined in the week ended September 3 as in-plant stocks fell rapidly in a traditional high season.
Declined output and optimism over consumption in a high season lowered rebar inventories at steelmakers. Blast furnace (BF) steel mills maintained stable production this week, while operating rates at electric arc furnace (EAF) mills slid 0.3 percentage point to 78.55% as of September 1 due to shortage of scrap steel. Optimism over consumption in a high season accelerated shipments of in-plant inventories to social warehouses. In addition, demand from infrastructure construction improved as the weather is getting better.
Spot rebar prices steadied above 3,800 yuan/mt after prices surged at the start of this week, but end-users were cautious about restocking due to tight cash flows.
Although rebar inventories started to shrink week on week, prices may not necessarily increase, as stocks remained about 40% higher than a year ago, and as demand has yet to improve significantly.
SMM data showed that overall inventories of rebar, including stocks across steelmakers and social warehouses, dipped 0.1% from the previous week to 11.57 million mt as of September 3, 39.6% higher year on year.
Rebar inventories at Chinese steelmakers slid 178,300 mt or 4.9% from a week ago to 3.48 million mt, up 45.4% year on year.
Inventories across social warehouses built up 164,000 mt or 2.1% on the week to 8.09 million, 37.2% higher than a year earlier.
Rebar inventories at Chinese steelmakers
Rebar stocks at social warehouses in China