Hot-rolled coil inventories return to contraction

SHANGHAI, May 17 (SMM) – Inventories of hot-rolled coil (HRC) across social warehouses and steel mills in China declined this week, after two consecutive weeks of gains.

Overall HRC stocks fell 1.1%, or 33,800 mt from a week ago to stand at 3.01 million mt as of Thursday May 16, down 3.5% from a year ago, SMM data showed.

This was driven by a drop in social stocks, which shrank 69,800 mt, or 3.3% to 2.06 million mt, down 5.2% year on year.

Stocks across steel mills, however, rebounded this week, expanding 4%, or 36,000 mt from a week ago and 0.5% from a year ago to stand at 947,300 mt.

Despite lower overall inventories, HRC prices slipped this week, with the nationwide average down 33.5 yuan/mt from the previous week to 4,007.3 yuan/mt, underperforming its ferrous peers.

The re-escalation of US-China trade dispute and tepid demand from automobiles and home appliances accounted for weak performance in HRC prices.