SHANGHAI, Jul 13 (SMM) – Social inventory of hot-rolled steel across China shrank over the week ended Thursday July 12 after multiple weeks of gains as the new Tangshan cut encouraged more buying.
The social inventory dipped 1% from a week ago to 2.09 million mt as of Thursday, 7.4% lower than the same period last year, SMM data showed.
Spot prices rose surprisingly amid a seasonal lull, lifted by Tangshan’s new, 43-day production cut. The 90-day deadline set by the US for companies to request exemptions from the 25% tariffs on $34 billion worth of Chinese imports also helped the sentiment.
Consumers bought on the way up with most of them making small purchases on a more frequent basis, SMM learned. This led to the inventory draw.
As the futures delivery date approaches, some traders also had to make spot purchases given their low inventory after they went long on paper and sold spot cargoes. This also spurred spot trading.
Hot-rolled steel inventories at mills, however, extended the gains over the past week and stood at 1.05 million mt as of Thursday, 17.2% higher than the same period last year. Such inventory has risen for four consecutive weeks.
Mills maintained their enthusiasm in hot-rolled steel production on high profits. Besides, many mills resumed production from maintenance in late June. The overall output rose in the past two weeks.
The overall inventory as of July 12, including social and in-plant stocks, held little changed at 3.13 million mt, 0.4% lower than the same period last year.