Ferrous futures fall on slow inventory decline
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Weekly inventory and production data on Thursday shuggested a slow recovery in steel demand. Chinese rebar and hot rolled coil futures fell back to Monday’s levels however as this was not enough to support market sentiment, Kallanish notes.
On the Shanghai Futures Exchange the January 2022 rebar contract closed CNY 128/tonne lower than Wednesday at CNY 5,108/t ($788/t), and the same contract for hot rolled coil closed down CNY 167/t at CNY 5,402/t.
Although rebar inventories maintained a steady decline this week under the pressure of rising production, the market is still disappointed by the pace of decline ahead of the approaching seasonal demanad recovery. HRC meanwhile ended two weeks of rising inventories thanks to lower production.
Overall rebar inventories were down 1.02% this week to 11.24 million tonnes, according to a count by SMM. Social rebar inventories fell 0.33% to 7.83mt, and mill inventories decreased 2.55% to 3.42mt. For HRC, meanwhile, overall inventories inched down by 1.61% to 3.98mt. Social inventory decreased 1.65% to 3.02mt, and mill inventory came to 958,500t, a drop of 1.49%.
In addition, Ningxia province began to to accelerate the pace of steel production reduction, including restrictions on the blast furnaces at Ningxia Steel, and a ban on the commissioning of new equipment in some ferroalloy plants (see separate article).
By Kallanish Team