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 China’s social inventory of rebar dipped 4% for the week ended March 29, a bigger drop than 3.5% seen the previous week.

This also marked a third consecutive week of decline as trading picked up and construction works resumed gradually.

However, the inventory was still some 20% higher on a yearly basis as consumption has not fully recovered due to bad weather and tight cash. It is expected to see a better recovery in April.

Rebar stocks at mills’ factories grew some 3.1% week on week, but most steelmakers reported lighter sales pressure. We believe continuous inventory growth at plants at high levels are unlikely.

Steelmakers like Nanjing Steel and Shuicheng Steel said that sales pressure made them lower the prices in mid-March, but prices are unlikely to dip further as they are close to the cost of production. Some steel plants including Fujian Sanbao, Fushun Xinfugang chose to bring forward the maintenance work to April, which would also ease some sales pressure.

While some steelmakers held a pessimistic outlook for the market and lowered prices to destock, we started to see more mills hold on to their offer levels.

source: from internet

• [Editor:Wang Linyan]