Steel stocks at Chinese mills fell 9%

Inventories in the five major steel mills of 184 Chinese steel mills, which Mysteel regularly monitors, have declined faster this week, according to the latest survey, with inventories declining 8.7% from November 25 to December 1 to 5.1 million tonnes. Market sources said the faster depletion of stocks was due to scheduled maintenance shutdowns at some steel mills at a time when sales were stable.



The five steel products include rebar, wire rod, hot rolled coil, cold rolled coil, and middle plate. By Wednesday, mill inventories were falling for three straight weeks, although this week's fall was much faster than the 2.4% weekly drop from the previous study period, Mysteel Global said.

“Many factories are doing regular maintenance, but sales are still going on, so stocks are gradually being emptied,” said a spokesman for a steel mill in northern China.

Steel mills, especially those located in northern China, where winters are particularly harsh, typically schedule their annual maintenance during the winter months when steel demand is low, he said.

The latest Mysteel survey found that the release of these five staples at 184 businesses also declined for the fifth straight week this week. Over the week, production fell another 0.7% to 8.9 million tons from November 25 to December 1.

However, the official predicted that steel production would pick up later this month or early January when factories resume operations, although the rate of renewal may vary from region to region.

Another Mysteel study found that 13 blast furnaces are scheduled to return to service across China this month. If that had happened, the country's pig iron production would have increased to 2.06 million tonnes per day from less than 2 million tonnes per day at present. In addition, Mysteel Global understands that the possibility of restarting three more blast furnaces is being considered.

The constant drop in inventories at their shipyards is causing some mills to try to maintain their selling prices. For example, Shagang Group, China's largest privately held manufacturer in eastern China, has decided to increase list prices for rebar, wire rod and wire rod for sale during December 1-10, as reported.

“Mill inventories continue to fall, and now there is even a slight shortage of long products of certain specifications on the market,” said a trader from East China.