Greater production slows declines in hot-rolled coil inventories

SHANGHAI, Apr 26 (SMM) – Inventories of hot-rolled coil (HRC) across social warehouses and steel mills in China saw a much smaller decline this week, as greater production grew inventories at steelmakers.

In the 11th week after the Chinese New Year holiday, overall HRC stocks dipped 0.9% from a week ago to stand at 2.96 million mt as of Thursday April 25, down 8.76% from a lunar year ago, SMM data showed. Overall HRC inventories have fallen for nine weeks in a row.

Social stocks shrank 2.03% to 2.06 million mt for the same week, standing 9.72% lower than the same period after CNY 2018.

Stocks across steel mills, however, snapped three consecutive weeks of declines and increased by 1.76% this week, coming in at 902,200 mt as of April 25, down 6.47% on a lunar year basis.

Smog alerts had little effect on steel production. This, together with recovering margins among steelmakers who use iron ore as feedstock, grew production enthusiasm across mills.

HRC production in April expanded from late March, even as greater profits that rebar could generate kept the growth in HRC output in check.