SHANGHAI, Feb 28 (SMM) – Increases in China’s inventories of construction steel rebar continued to slow this week, especially for the stocks at steelmakers, as demand recovered gradually and production remained capped by expanded maintenance at steel mills.
Resumption of logistics accelerated the shipment of cargos from steel mills to social warehouses, and this also accounted for the much slower accumulation of in-plant inventories.
A rally in rebar futures at the start of the week lifted market sentiment and prompted traders to restock, which somewhat eased the buildup in social inventories.
Amid the slide in rebar production for two consecutive months, better shipments reported by sellers seemed to suggest that rebar fundamentals have improved. However, the upward trend in overall rebar stocks may sustain until mid-March as the rate of resumption for downstream construction work has not recovered significantly. This is expected to expand any downside room in spot rebar prices in the near term.
According to SMM data, rebar inventories at Chinese steelmakers stood at 7.5 million mt as of February 27. This was up 5.8% from February 20, compared to a 14.2% rise last week.
Inventories across social warehouses advanced 11.7% on the week and stood at 12.36 million mt, with the rise slowing from a buildup of 14% in the previous week.
Overall inventories of rebar, including stocks across steelmakers and social warehouses, increased 9.4% and posted 19.86 million mt as of February 27, after an increase of 14.1% in the prior week.
On a yearly basis, overall inventories were 49.8% higher as of February 27, following a buildup of 33.1% last week.
