SMM HRC Social Inventory Overview: Weak Supply, Strong Demand Leads to Widened Decline

【SMM HRC Social Inventory Overview】Weak Supply, Strong Demand, Social Inventory Decline Widens

This week, SMM's statistics from 86 warehouses nationwide (large sample) showed HRC social inventory at 3.8347 million mt, down 195,800 mt MoM, a 4.86% MoM decrease, and down 8.8% YoY. This week, the national social inventory continued to decline. By region, the declines in the south China, east China, and north China markets were greater than those in the central China and north-east China markets.

Some steel mills shifted pig iron production, leading to a slight reduction in HRC supply. Futures fluctuated rangebound, and market procurement demand improved compared to the previous period. With weak supply and strong demand, the decline in social inventory widened. Looking ahead, steel mills remain highly motivated to produce, with few new maintenance plans, indicating that supply pressure will continue to rebound. However, demand release remains resilient, and the national social inventory is expected to continue to decline in the short term.