Hot-rolled coil inventories rise for 6 weeks

SHANGHAI, Jul 5 (SMM) – Hot-rolled coil inventories across social and in-plant warehouses in China rose for a sixth straight week this week, showed an SMM survey, pointing to continued weakness in fundamentals.

Overall HRC stocks gained 1.2% from a week ago and 3% from a year ago to stand at 3.22 million mt as of Thursday July 4.

Stocks at steelmakers, however, declined this week after two consecutive weeks of gains, as speculative demand drove traders to step up purchases after spot prices followed futures higher.

In-plant HRC inventories shrank 1% this week to 903,900 mt, some 11.6% lower than the same period last year.

This, together with the arrival of deliveries under long-term contracts, expanded social inventories by 2.1% this week, which expanded for six weeks in a row to stand at 2.32 million mt, up 10.1% year on year.

The arrival of shipments from mills spurred by speculative demand is expected to continue to grow HRC social inventories, until the impact from production curbs in Tangshan takes hold.