China’s steel stocks back on the rise

China’s stores of steel rose in August by the most in four months, lending further urgency to recent restatements of Beijing’s goal to cut overcapacity.

Stocks of steel rose 2.13 per cent in August compared to a month earlier to a total of 7.97m tonnes, according to new data from the China Iron and Steel Association. Stocks had shrunk by almost 4 per cent in July in month-on-month terms.

The most significant rise came from reserves of rebar, the key construction component, which grew by 7.43 per cent to 3.32m tonnes this month – the first such rise this year. That’s in line with weekly figures from the association showing rebar stocks bottomed out in mid-July and have been on the rebound ever since.

Cold-rolled steel was the only other gainer this month with a rise of 1.28 per cent in reserves, while hot rolled steel – the second-largest contributor – saw a drop of 3.77 per cent from July.

In year-on-year terms, total stocks were down 2 per cent.