SHANGHAI, Dec 28 (SMM) – Hot-rolled coil (HRC) stocks across social warehouses and steelmakers in China came in at 2.76 million mt as of Thursday December 27, down 1.3%, or 37,000 mt from a week ago, SMM data showed.

With five weeks left before the week-long Chinese New Year break starts, HRC inventories gained 3.3% on a yearly basis.

As of December 27, HRC social stocks declined for a ninth straight week to stand at 1.83 million mt, down 2.9% from a week earlier. HRC social stocks stood only 0.9% higher than five weeks before the 2018 Chinese New Year.

Pessimistic outlooks prompted traders to hold back stocks, resulting in consecutive declines in social stocks.

For the same week, HRC stocks across mills gained 2% to 926,300 mt, up 8.2% from a year earlier on a lunar calendar basis.

Dips in overall stocks are set to support HRC prices into the near term, while prices face downward risk in January as the imminent Chinese New Year would substantially shrink demand. The government of Tangshan, China’s top steelmaking city, said on Tuesday December 25 that the city met its annual ecological and environmental quality target. This raised the likelihood of looser restrictions on production, which would increase supplies and weigh on prices.