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Construction Steel Prices Solid on Dropping Inventories

Number of visits: Date:2010-12-13
"Newly increased market supply is limited. The annual shift of products from North China to South China in December is also smaller," a construction steel trader based in Shanghai told us, "The shipment, usually 20,000-30, 000 tonnes a batch in the previous years, decreased notably this year. Arrivals of products from New Fushun Steel and Xilin Steel (from North China to South China) are only about 4,000 -5,000 tonnes this year."

The visible shortfall is particularly significant in Hangzhou City , Zhejiang province, an important market area in East China , where 10mm , 12mm , 14mm , 16mm rebar all meet deficits.

In Guangzhou , inventories are low even though the construction works are affected by the Asian Games. "Product arrivals get affected by transportation too. And products that annually come down to South China from North part also decrease this year."

In Beijing , most market resources concentrate in the hands of few big traders while most counterparts' stockpiles have been under normal level.
Why did inventories decrease?
The primary cause to the dropping inventories is power cuts, as Bejing vows to accomplish environmental protection tasks in its 11th Five-Year Plan (2006-2010).

The traditional seasonal slowdown also contributes to the dropping stockpiles. Traders are prudent in organizing products in Winter, the slack season of the year.

Outlook on the next weeks

1. Low inventories to continue in short time
China produced 1.601 million tonnes of crude steel per day in the first ten days of November, amounting to 586.5 million tonnes for the year when calculated on an annual basis.
Traders based in Shanghai , Beijing believe the tight supply is to continue in December.

2. Slim chance for price rises
Most traders believe market demands are unlikely to improve in the traditional off season and thus are prudent on the outlook on the next weeks, even though the prices is backed by decreasing inventories.

TypeInfo: Industry News

Keywords for the information:seamless steel tube  seamless steel pipe  structural tube  petroleum steel pipe  square steels  spiral steel  H beam  IPN  IPE