As of January 11, inventory of the main finished steel products (plate, hot rolled coil (HRC), cold rolled coil (CRC), rebar and wire rod) in major steel markets in China totaled 14.017 million mt, up 388,000 mt compared to the previous week and constituting the fourth consecutive week-on-week increase, according to the China Iron and Steel Association (CISA). Meanwhile, the total finished steel inventory in the Chinese market was 264,000 mt higher compared to the same time last year.
In particular, inventory of rebar indicated an increase of 206,000 mt compared to the previous week, rising for the seventh consecutive week on week-on-week basis. Inventory of rebar in China as of January 11 exceeded 6 million mt. As of the same date, wire rod inventory in China was up 108,000 mt week on week. Hot rolled coil inventory in China increased by 92,000 mt, while domestic inventories of cold rolled coil and plate were respectively down 12,000 mt and 6,000 mt, all on week-on-week basis.
The sharp increases in iron ore prices have lately provided a certain upward impetus for finished steel prices in China; however, the uptrend in Chinese domestic steel prices witnessed a slowdown late last week and certain prices of finished steel and semi-finished steel were even corrected downward.
Meanwhile, there is expected to be less support for increases in finished steel inventory in the coming period due to steel mills’ reduced profit margins and their lower production activities. On the other hand, China’s finished steel inventory may increase further because of the ongoing slackness of market activity.