Production limitations, cash-in enthusiasm weigh down hot-rolled steel inventory

SHANGHAI, Jul 27 (SMM) – Hot-rolled steel inventory across Chinese steel mills ceased its multiple weeks of gains this week due to the production limitations at some mills on environmental concerns.

Mill’s strong interest in cashing in amid high profit margins also contributed to the fall, SMM learned.

As of Thursday July 26, in-plant stocks of hot-rolled steel stood at 1.02 million mt, down 4.8% from a week ago but up 12.3% from a year ago.

Meanwhile, social inventory edged up as arrivals exceeded shipments leaving the warehouses. Arrivals at warehouses in east and south China grew this week while downstream consumers were cautious in making purchases amid a low season.

As of Thursday, social inventory of hot-rolled steel came in at 2.14 million mt, up 0.6% week on week but down 4.6% year on year.

The overall volumes, including social and in-plant stocks, shrank 1.2% from a week earlier to 3.16 million mt. This put the brakes on the increase for seven consecutive weeks. The figure was 0.2% higher from the same period last year.