The Commodities Feed: Steel demand in China disappoints | articles

Steel inventories at major Chinese steel mills rose 3% year-on-year to 19.5mt in mid-March and remained almost flat compared to levels seen in early March, according to data from the China Iron and Steel Association (CISA). Inventories are increasing as the pick-up in steel consumption from end-users is weaker than expected at this time of the year. Meanwhile, crude steel production at major mills fell marginally by 0.5% from mid-March and 9% YoY to 2.05mt/d in late March, as some steelmakers had begun maintenance stoppages on their blast furnaces in response to margin losses. The most active contract of iron ore trading at SGX fell for a second consecutive day this morning with prices falling below $103/t amid weak demand from the Chinese steel industry primarily due to the prolonged property sector crisis.

Meanwhile, the latest LME COTR report released yesterday shows that investors boosted net bullish positions for copper by 841 lots for a sixth consecutive week to 80,535 lots for the week ending on 22 March 2024, the highest bullish bets since mid-October 2020. The fund managers have been increasing bullish bets in copper following signs of supply stress and higher prices. Similarly, net bullish bets for aluminium rose by 8,010 lots for a third straight week to 122,900 lots at the end of last week. This was the highest level since the week ending on 2 February 2024. In contrast, money managers decreased net bullish bets for zinc by 2,851 lots to 26,074 lots as of last Friday.

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