SHANGHAI, May 24 (SMM) – Inventories of hot-rolled coil (HRC) across social warehouses and steel mills in China fell for a second straight week this week, while prices held stable.
Overall HRC stocks fell 2.1%, or 64,600 mt from a week ago to stand at 2.95 million mt as of Thursday May 23, down 1.1% from a year ago, SMM data showed.
Lower in-plant stocks accounted for the decline. In-plant stocks fell as higher prices of futures bolstered purchases by end-users and speculative traders.
HRC stocks across steelmakers shrank 39,000 mt, or 4.1% to 908,300 million mt, down 2.8% year on year.
While high prices of raw materials narrowed profit margins for steel production with iron ore as feedstock, the average margin for HRC production remained at 350-450 yuan/mt.
Stocks across social warehouses posted two consecutive weeks of declines, down 25,600 mt, or 1.2% this week to 2.04 million mt, standing 0.4% lower than a year ago.
Despite robust demand, social HRC inventories saw limited declines this week after they fel to relatively low levels.
The average price of HRC across the markets stood at 4,006.9 yuan/mt this week, down 0.3 yuan/mt from the previous week.