STEEL NEWS

China's steel inventories decline as demand rises

According to Reuters, steel inventories in China have been declining for the sixth consecutive week, helped by accelerated demand in the construction sector, but they still fluctuated around a 5-year high, as factories increased production after slowing production at the height of the outbreak of coronavirus.

Stocks of metal products held by traders fell by 1.15 million tons to 20.13 million tons as of Thursday, according to data collected by the consulting company Mysteel. More than 70% of the fall was in the fittings and wire rod.

The construction sector has grown rapidly since the end of March. The daily volume of trade in metal products is even slightly higher than last year due to the stimulation of the government in the field of infrastructure and the resumption of projects.

Northern China resumed construction a month later than southern, which could lead to increased demand, according to a Hebei trader who wished to remain anonymous.

Zhuo Guiqiu, an analyst at Jinrui Futures, expects demand to increase next week ahead of China's Labor Day, May 1-5, and also expects stocks to remain high if the mills continue production at a fast pace.

Steel production in China grew 1.2% to 234.34 million tons in the first quarter compared with the same period a year earlier.

The China Iron and Steel Association warned on April 23 that high stocks could be the norm this year.