Market Reflects High Screw Inventory Levels: Industry Attribute it to Market Panic Atmosphere

5 月 31, 2023 | TW Screw Industry

China Steel Corporation(Abbreviation CSC) to Announce Q3 Bar Wire Prices in Mid-June, Soft Export Orders Slow Inventory Clearance for Screw Manufacturers.

Some screw manufacturers have reported slow inventory clearance as CSC is set to announce Q3 bar wire prices in mid-June amid weak export orders. Some manufacturers have expressed concerns about high inventory levels, but other industry players have offered different perspectives. These industry players believe that inventory levels have been decreasing across various factories, and the lack of orders is the biggest issue. The market atmosphere is tense, and regardless of the actual inventory levels, there is a perception of high inventory.

Due to the ongoing absence of screw order demand this year, many manufacturers have reduced their inventory levels to around 2-3 months. In terms of procurement, various factories have been cutting their quotas and are waiting for order recovery and confirmation of the new prices from CSC before making further decisions. Some manufacturers have also raised concerns about high inventory levels with the steel plant.

The industry representatives also note that it is important to remember that in the previous years, screw orders experienced a significant increase, and many factories had inventory levels exceeding 6 months. On average, inventory levels would typically remain at 3-6 months or more. This year, as factories began reducing their quotas, the market has already undergone significant inventory clearance, and the current levels are at most returning to the usual levels.

The industry representatives emphasize that the most critical concern in the market is still how CSC will adjust bar wire prices. Price reduction is necessary, and whether it is a significant or slight decrease, it may not necessarily impact procurement demand. However, a slightly larger price reduction would definitely help with export orders in the third quarter. If the market price drops significantly at once, customer acceptance would also improve.

Cover picture by PhotoAC

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