SHANGHAI, Aug 9 (SMM) – Social inventories of hot-rolled coil (HRC) in China continued to grow this week, as buyers exercised caution amid eased production curbs in Tangshan, escalated tensions between the US and China and lower iron ore prices.
SMM data showed that HRC stocks across social warehouses rose for an 11th straight week, gaining 0.8% from a week ago to stand at 2.53 million mt as of Thursday August 8. The growth was limited by fewer arrivals, as rainfall in the south-west and Zhejiang impacted transportation.
Delivery disruption, together with production ramp-up from eased curbs in Tangshan and recovered profit margins, bolstered HRC stocks across steelmakers in China.
In-plant inventories rebounded 0.7% this week, to stand at 961,800 mt, with a year-over-year decline of 2.4%.
The net profits that mills can expect to get for producing HRC currently stand at about 100 yuan/mt. A separate SMM survey showed that planned HRC production across major Chinese steelmakers for August was 0.7% higher than July.
Overall stocks across social and in-plant warehouses in China came in at 3.49 million mt as of August 8, up 0.8% week on week and 9.1% year on year.