Lower stocks of HRC in first week after CNY bolster prices

SHANGHAI, Feb 13 (SMM) – Inventories of hot-rolled coil (HRC) in China at the start of the first week after the Chinese New Year holiday stood 9.3% lower than the same period last lunar year, which would provide some support to prices.

HRC inventories across steelmakers and social warehouses stood at 3.59 million mt as of Tuesday February 12, up 20.3% from Thursday January 31, the end of the last week before the CNY break, SMM data showed.

Overall HRC inventories peaked in the second week after the CNY holiday in 2017 and 2018.

Stocks across social warehouses expanded 19.2% over the holidays to stand at 2.51 million mt as of February 12, down 3.4% from last lunar year.

As demand gradually picks up, HRC social inventories are expected to slow their growth. Historic data showed that HRC social stocks in China peaked in the third week after the CNY break.

As of February 12, HRC stocks at steel mills came in at 1.08 million mt, gaining 22.9% over the holidays but standing 20.4% lower than last lunar year.