SHANGHAI, Oct 16 (SMM)—Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China saw the largest weekly decline since early July this week, as more steelmakers underwent maintenance and demand surged after the National Day holidays.
SMM data showed that HRC stocks across social warehouses and steelmakers shrank 4.75%, or 206,600 mt in the week ended October 15 to 4.14 million mt, after a 6.94% gain in the previous week. The stocks were 25.31% higher than the same period last year.
China HRC social inventories
Restocking demand from end-users rose significantly after the National Day holidays as their raw material inventories ran low. In addition, driven by production restrictions at steelmakers in Tangshan and rising billet prices, HRC futures rebounded sharply in the first several trading days after the holidays, and trades were robust. These led to a rapid fall in HRC social inventories.
SMM data showed that HRC stocks across social warehouses fell 3.87% or 118,600 mt on the week to 2.95 million mt. This was 25.2% higher than the same period last year.
China HRC in-plant inventories
HRC output declined more than 100,000 mt on the week as more steelmakers underwent maintenance. Traders stockpiled actively after the holidays, accelerating cargo shipments from steelmakers to social warehouses. In-plant HRC inventories declined 6.87%, or 87,900 mt, from the prior week to 1.19 million mt this week.
Robust trades post-holiday resulted in the sharp falls in HRC inventories this week, in line with market expectations. But the decline is expected to narrow next week as trades are likely to weaken.
