SHANGHAI, Jan 8 (SMM)—Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China continued to rise this week, posting greater supply pressure.
SMM data showed that HRC stocks across social warehouses and steel makers expanded 136,800 mt or 4.58% from the previous week, and 32.21% on the year, to 3.12 million mt in the week ended January 7.
Inventories across social warehouses increased 83,400 mt or 4.17% week on week to 2.08 million mt. This was 33.22% higher than the same period last year. Trades were tepid in the spot market as downstream users remained cautious about restocking raw materials. This, combined with the New Year's Day holiday, led to the increase in HRC social inventories.
Stocks at Chinese steel makers came in at 1.04 million mt, up 53,400 mt or 5.41% week on week and 30.25% year on year. Weakened orders at steel mills and a resurgence of COVID-19 cases in Hebei which resulted in transport restrictions slowed shipments from steel mills to social warehouses.
Shipments of cargoes from northern steel makers to the southern market are likely to be affected by transport restrictions imposed to curb the resurgence of coronavirus in Hebei. Limited arrivals of cargoes in south China will slow local inventory build-up, which will support spot HRC prices.
