SHANGHAI, Mar 12 (SMM) – Inventories of rebar across Chinese steelmakers and social warehouses stood at 17.71 million mt as of March 11, up 2.08% from a week ago.

From the time dimension of the lunar calendar, stocks are down 10.8% from a year earlier. With the continuous recovery of end-user demand, China steel rebar inventory continued to post slower increase this week.

Inventories at Chinese steelmakers rose 105,000 mt on the week and stood at 5.52 million mt. From the time dimension of the lunar calendar, stocks are up 1.94% from a week ago and down 26.4% from a year earlier.

As the operating rates of electric arc furnace steel plants continued to rise (according to SMM survey, as of March 10, the operating rates of EAF steel plants continued to rise by 4.39 percentage points from last week, reaching the highest level since July 2020), the supply side continued to show an increase, and the supply is expected to maintain a high level in the near term due to the moderate profitability of the steel mills. The increase in the scale of the inflow of in-plant stocks also accounted for the increase in the in-plant stocks.

Inventories at social warehouses rose 256,600 mt on the week and stood at 12.19 million mt, up 2.15% from a week ago and 1.4% lower from a year ago.

End-user demand was still in the process of recovering, and spot prices experienced a callback this week, which stimulated the release of some end-user demand that kept high prices in the early stage. But in fact, after the holiday, commodities experienced a strong rise, and end-user construction site funding pressure increased, which dragged down the recovery speed of steel demand. At the same time, East China and other places were shrouded in rain recently, which also restrained the release of some end-user demand.

At present, the demand for rebar is recovering rapidly, and the growth rate of inventories is narrowing. Stocks are expected to trend lower next week. Spot prices still have a relatively strong bottom support. In the past two days, as the ferrous metals market led by the decline in iron ore caused by environmental protection restrictions generally fell, the negative sentiment that end-user demand recovered slower than expectation was also released. Rebar prices are becoming firmer and are expected to keep fluctuating robustly in the following weeks.