<article><p class="lead">Steel product inventories in China's major markets fell by 8.5pc from a month earlier to 8.59mn t on 21 November, as sharp price declines discouraged stockbuilding.</p><p>Stocks of rebar, a key construction steel product, fell by 21pc over the period to 2.68mn t in 20 major markets. Stocks of wire rod fell by 14.8pc to 900,462t, the China iron and steel association (Cisa) said.</p><p>Among flat products, stocks of hot-rolled coil and plates rose by 1.7pc to 1.98mn t and by 8.2pc to 1.2mn t respectively. Cold-rolled coil stocks fell by 2.6pc to 1.82mn t.</p><p>Steel prices in China have fallen by over 20pc this month, eliminating net profit margins for some mills and leaving many steelmakers operating at close to breakeven levels. </p><p>Trading firms have put off seasonal restocking of rebar as they wait for markets to bottom out. Some market participants said buying may pick up pace at Shanghai ex-warehouse prices of around 3,200-3,500 yuan/t ($461-504/t). The rebar price was at Yn3,830/t yesterday. </p><p>Stockbuilding for the rest of the winter and the lunar new year holidays may not start until mid- to late December. </p><p>Steel mills are increasing their use of lower-grade iron ore in the furnace burden to save costs and control output. Any significant reduction of steel output as a result may support prices and hasten restocking by traders in the near term.</p></article>
