China steel rebar inventory down 2.22% on week

SHANGHAI, Mar 19 (SMM) – Inventories of rebar across Chinese steelmakers and social warehouses stood at 17.31 million mt as of March 18, down 2.22% from a week ago. From the time dimension of the lunar calendar, stocks are down 17.4% from a year earlier. With the continuous recovery of end-user demand, the inflection point of rebar inventory this week came as scheduled.

Inventories at Chinese steelmakers fell 166,600 mt on the week and stood at 5.35 million mt. From the time dimension of the lunar calendar, stocks are down 3.02% from a week ago and down 30.6% from a year earlier.

In-plant stocks started to decline this week. On the one hand, Tangshan, Wu'an, Yantai and other places successively implemented production restrictions for environmental protection, suppressing the output increase of steel mills and cutting the inflow of in-plant stocks. On the other hand, rebar contracts fluctuated widely this week. Market speculative sentiment was fully mobilised, merchants' willingness to restock increased significantly, and the transfer of in-plant stocks to social stocks continued to accelerate.

Inventories at social warehouses fell 226,800 mt on the week and stood at 11.97 million mt, down 1.86% from a week ago and 9.6% lower from a year ago. End-user demand continued to recover. Most businesses and construction sites indicate that the steel demand have recovered about 80%.

The inflection point of rebar inventory reduction has come, and the rate of reduction in the following weeks is likely to continue to accelerate. In the case of limited increments on the supply side and large room for recovery on the demand side, the later spot prices may continue to fluctuate upward. However, from the current point of view, the recovery of end-user demand was suppressed. The current weekly rebar consumption level has not yet recovered to the level of the same period in previous years. Rebar prices are likely to undergo short-term fluctuations and wait for the strong return of demand.