SHANGHAI, Sep 27 (SMM) – Social inventories of hot-rolled coil (HRC) in China fell this week, as intensified production curbs to combat air pollution across various regions improved market sentiment, adding to downstream factories’ raw material stockpiling ahead of the week-long National Day holiday.

SMM data showed that HRC stocks across social warehouses declined 1.8% from a week ago to 2.3 million mt as of Thursday September 26. The social stocks fell in six of the last seven weeks.

On a year-over-year basis, HRC social inventories in China rose 3.8%.

Stronger demand and environmental restrictions led to a decline of 4% in stocks across steelmakers this week, standing at 937,000 mt as of September 26, 7.4% lower than the same period a year earlier.

The decline in in-plant stocks was smaller than SMM’s forecasts, as stricter controls on road transportation and the suspension of some ports deterred shipments from steel mills.

Cargo shipping will recover after authorities remove the restrictions on road transportation after September 27. This, together with the closure of trading across most spot markets during the break, is set to grow inventories.

Overall HRC stocks across social and in-plant warehouses in China came in at 3.23 million mt as of September 26, down 2.4% from a week ago but up 0.3% from a year ago.