SHANGHAI, Oct 18 (SMM) – Inventories of hot-rolled coil (HRC) in China fell this week, as steelmakers deepened production cuts to combat heavy smog or conducted maintenance.
SMM data showed that stocks of HRC across social warehouses and steel mills decreased by 3.3% from a week ago to 3.3 million mt as of Thursday October 17.
On a yearly basis, stocks declined 4.6%, larger than a dip of 1.4% seen as of October 10.
Inventories were also lowered by stable trades across the spot market. While demand generally weakened from the prior week, transactions were actively done at low prices as sellers were willing to lower offers to discharge cargoes on pessimistic sentiment across the market.
As of October 17, social inventories of HRC fell 4.1% from a week earlier and 3.7% from a year earlier to 2.35 million mt. In-plant stocks stood at 949,100 mt, down 1.1% week on week and 6.6% year on year.
Spot HRC prices in China have slipped to the lowest for this year, with Benxi Steel’s cargoes traded at 3,520 yuan/mt in Shanghai as of October 17, down 550 yuan/mt from a peak of 4,070 yuan/mt hit on May 7.
SMM expects that only a substantial decline in production could stem losses in prices, as northern regions have intensified production curbs recently.