There are worrying signs that the trend towards a steel surplus predicted for the latter part of the year was already in evidence at the beginning of the third quarter. Earlier this year members had reported to the Metals Service Center Institute (MSCI) that their surplus coil stocks were melting away month by month. In January stock cover (holdings divided by sales) stood at over 16.5 weeks. By the end of June cover finally fell to the target 13-week level. Then in July the trend reversed, and centres ended the month with 15 weeks' supply on hand. Seasonal factors may have exaggerated the picture. Average daily offtake was down to just over 40,000 tonnes in July, compared with 43-44,000 tonnes in June, which would raise the stock ratio even if inventories had remained unchanged. There was, however, a big absolute rise in stocks of around 127,000 tonnes.
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