[SMM HRC Weekly Balance & Social Inventory Overview] Marginal Weakening in Supply and Demand, with an Expanded Accumulation of Social Inventory!

Ø  Weekly Balance of HRC

Ø  HRC Total Inventory Accumulation Before and After Chinese New Year (Small Sample)

This week, the total HRC inventory was 4.0925 million mt, up 49,100 mt WoW (+1.21% MoM), down 8.21% YoY, and down 2.74% on a lunar YoY basis.

Ø  This Week's Production Narrowly Declined

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This week, some steel mills in north China conducted maintenance on rolling mills and other equipment, leading to a slight decline in HRC production.

Ø  This Week's Social Inventory of HRC Increased

This week, according to SMM statistics, the social inventory of HRC across 86 warehouses nationwide (large sample) was 4.5756 million mt, up 99,900 mt WoW (+2.23% MoM), down 4.67% on a lunar YoY basis. Nationwide social inventory continued to accumulate this week, with the growth rate expanding. By region, except for slight declines in inventory in central and north-east China, inventories in east, south, and north China all increased. Specifically:

l  [Shanghai] Inventory in Shanghai Continued to Decline This Week

This week, Shanghai's HRC inventory was 362,900 mt, down 16,000 mt WoW (-4.22%), with a YoY decline of 26.04% and a lunar YoY decline of 13.35%.

l  [Lecong] Inventory in Lecong Continued to Accumulate This Week

This week, Lecong's HRC inventory was 107,740 mt, up 47,000 mt WoW (+4.56%), with a YoY increase of 21.14% and a lunar YoY increase of 13.26%.

l  [Zhangjiagang] Inventory in Zhangjiagang Turned to Increase This Week

This week, Zhangjiagang's HRC inventory was 454,000 mt, up 31,000 mt WoW (+7.33%), with a YoY decline of 18.64% and a lunar YoY increase of 0.89%.

Some steel mills in north China have added new maintenance plans, leading to a slight decline in HRC production. During this period, anti-dumping measures significantly impacted futures, suppressing market purchasing enthusiasm. Both supply and demand weakened marginally, and the degree of social inventory accumulation expanded. Looking ahead, some steel mills are expected to implement additional maintenance, which may ease supply pressure. With the approach of the Two Sessions and the fading impact of anti-dumping sentiment, suppressed end-use demand is expected to recover. In the short term, nationwide social inventory is likely to decrease.