In the first quarter of 2020, China’s steel stocks fell slowly after a sharp rise

Reported by Luke 2020-4-24

According to data from the General Administration of Customs, China’s steel export volume in March increased by 2.4% year-on-year and the export value increased by 1.5% year-on-year; steel import volume increased by 26.5% year-on-year and import value increased by 1.7% year-on-year. In the first quarter of 2020, China’s cumulative steel export volume fell by 16.0% year-on-year, and the cumulative export value fell by 17.1% year-on-year; the steel import volume increased by 9.7% year-on-year, and the cumulative import value fell by 7.3% year-on-year.

China Steel Association analysis shows that this year, the peak of steel stocks increased significantly. Although inventories began to decline from mid-March, as of the end of March, steel mill inventories and social inventories were 18.07 million tons and 19.06 million tons, respectively, still higher than the same period in previous years. Inventory continues to be high, affecting the stable operation of the outlook. If the production intensity of an enterprise exceeds market demand, the process of destocking will be very difficult, and high inventory may become the norm in the steel market this year. At the same time, high inventory takes up a lot of funds, affecting the company’s capital turnover.