WEEKLY: China's retail steel stocks drop further

• Steel stocks dropped for fifth consecutive week
  
  
• Rising construction demand drove down total inventories
  
  

Mysteel: Retail stocks of the five major finished steel items stored in the commercial warehouses across China regularly checked by Mysteel eased for the fifth week in a row during April 10-16, the results of Mysteel's latest weekly survey show

The combined inventories of rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate stockpiled in warehouses in the 132 cities under Mysteel's tracking had thinned by 2.5% or 547,800 tonnes on week to 21.71 million tonnes as of April 16.

Despite the on-week decline, the level was still higher by a large 21.5% compared to the corresponding period last year, indicating relatively high inventory pressure for traders.

Stocks of all five carbon steel products recorded on-week falls during the period, with the volumes of rebar and wire rod contributing the most to the dip and accounting for 71.9% of the overall inventory decline, the results show.

Specifically, rebar inventories had retreated by 2.7% or by 254,100 tonnes on week to 9.06 million tonnes by April 16, while stocks of wire rod had dropped by 5.3% or 139,600 tonnes on week to 2.49 million tonnes as of the same day.

Spot transactions became more active as end-user sectors - especially construction companies - took advantage of milder temperatures to become active in building projects and manufacturing. Consequently, inventory levels of the five items declined, Mysteel Global noted.

For instance, the daily spot trading volume for long steel items comprising rebar, wire rod and bar-in-coil among the 237 trading houses under Mysteel's tracking averaged 105,813 tonnes/day over April 9-15, up by 5.2% or 5,271 t/d on week.

On the supply side, some steelmakers scaled down their pace of production this week, leading to a decline in output overall which in turn, drove down steel stocks, Mysteel Global noted.

The combined output of the five steel products during April 9-15 among the 137 Chinese steel mills under Mysteel's coverage totalled 8.55 million tonnes, edging down by 0.4% or 31,500 tonnes on week.

Meanwhile, domestic finished steel prices recovered slightly this week, partly due to better end-user demand, with Mysteel assessing the national price of HRB400E 20mm dia rebar at Yuan 3,330/tonne ($488/t) including the 13% VAT on April 15, up by a small Yuan 8/t from April 8.

On the same day, Mysteel assessed the average price of Q235 4.75mm HRC nationwide at Yuan 3,321/t including the 13% VAT, gaining by a negligible Yuan 7/t on week.

Finished steel inventories held by traders in Mysteel's smaller sample of 35 cities also slid further over the survey week. The same survey findings placed the tonnage at 12.94 million tonnes as of April 16, down by 3% or by 396,800 tonnes on week from April 9.