China Securities Journal reported that the inventory of four major steel varieties totaled 12.40 million tonnes dipping but at a slower speed.

Mr Sheng Zhicheng deputy secretary of a steel logistics committee said it’s not a very high level compared with past years even if gaining some 40% to reach 17 million tonnes around end February and early March. But the tightness of credit is more concerned about steel stock building in winter.

As per report, the construction steel inventory dipped in the first week of Dec, but recovered a bit last week, showing a variable trend. Compared to past years, the storing timing is likely to be postponed. And there is an uncertainty about the scale of storage considering the high cost.

But according to some analysts, the funds will decide all. Loose credit this year is the reason why steel inventories stand high. Yet the central bank has raised up reserve ratio again to 18% while discount market was in the past.

Mr Xu said tightening of credit is understood to directly affect the storage. Apart from that, the steel supply is likely to recover as the energy saving measures fade out at the yearend possibly to change the uptrend.

(Sourced from China Securities Journal)