SHANGHAI, Apr 29 (SMM) – Production and demand in the market both boomed this week with rising prices. The average rebar prices stood at 5,169 yuan/mt as of April 30, up 125 yuan/mt from last week. Apparent demand picked up, up 7.26% from the previous year. In-plant stocks and social stocks posted faster decrease, and the pre-holiday stockpiling demand was fulfilled as agreed.
Inventories of rebar across Chinese steelmakers and social warehouses stood at 12.12 million mt as of April 29, down 7.4% from a week ago. Stocks are down 12.8% from a year earlier. Rebar inventories posted faster decrease before the holiday as end-user stockpiling demand was fulfilled well.
Inventories at Chinese steelmakers fell 295,200 mt on the week and stood at 3.53 million mt. Stocks are down 7.7% from a week ago and down 14.7% from a year earlier. The year-on-year decrease narrowed 1.1 percentage points from last week.
Inventories at social warehouses fell 679,700 mt on the week and stood at 8.59 million mt, down 7.3% from a week ago and 12% lower from a year ago. The week-on-week decrease expanded 1.8 percentage points from the previous week. The year-on-year decrease rose 0.3 percentage point from the previous week.
Steel prices rose sharply at the beginning of this week mainly due to the expected reduction in steel mill output and the expected increase in pre-holiday stockpiling demand. Although the production restriction documents in Jiangsu have not appeared, the steel export tax rebate policy was launched in the middle of the week, and the benign fulfillment of the bad news has made the market fluctuate more strongly, and the spot was firm.
Inventory data performed well. In-plant stocks and social stocks posted faster decrease than last year. The rate of decline in social stocks was flat year on year. Due to the steady increase in output, according to SMM data, the actual production of rebar this week increased by 3.18% year on year, and the rate of decline in in-plant stocks was lower than that of the same period last year.
Looking at the market outlook, with the implementation of the export tax rebate policy, the benefits are exhausted. With the support of the stockpiling on rigid demand before the holiday, prices can still keep trading strongly, and stocks will posted faster decrease. After the May Day stockpiling, the market during the holiday will face a certain risk of accumulation, and the increase of funds in May requires new speculation topics. Before the new crude steel reduction policy is introduced, prices will continue to consolidate at a high level.
