SHANGHAI, Mar 7 (SMM) – Inventories of hot-rolled coil across social warehouses and steel mills in China declined for a second straight week in the fourth week after the Chinese New Year holiday as downstream consumers stepped up consumption.

SMM data showed overall HRC inventories stood at 3.68 million mt as of Thursday March 7, down 1.71% from a week ago and 6.6% from the same period after 2018’s CNY break.

For the same week, social stocks fell for the first time since the new lunar year, coming in at 2.68 million mt, down 1.98% from a week ago and 6.1% from a lunar year ago.

Stocks across mills shrank 0.98% to 998,300 mt this week, standing 7.8% lower than the same period after the CNY break in 2018. HRC in-plant inventories decreased by 5.2% in the previous week.

Prices of HRC averaged 3,853 yuan/mt this week, up from 3,835 yuan/mt last week. HRC prices are expected to extend their gains next week as growing trades ease inventory pressure and as US-China trade optimism improves market sentiment.