SHANGHAI, Nov 8 (SMM) – Inventories of hot-rolled coil (HRC) in China trended lower for a fourth straight week, as demand ramped up, especially from pipe producers in the north.
SMM data showed that stocks of HRC across social warehouses and steel mills decreased by 4.3% from a week ago to 2.87 million mt as of Thursday November 7, with a year-over-year decline of 11%.
Stronger demand, coupled with limited arrivals, lowered HRC social inventories this week, down 5.2% from a week earlier to 1.98 million mt, marking a fourth consecutive week of decline.
In the spot markets, inventory decline and shortages of some specifications are likely to continue into next week, which will help assuage pessimism across the markets and bolster spot prices.
HRC inventories across steelmakers fell 2.1% to 890,700 mt this week, after rising 1% in the prior week, even as mills have mostly recovered from maintenance or anti-smog curbs.
Northern pipe producers contributed to the decline in in-plant inventories, as they purchased HRC instead of steel strip to meet their robust demand in view of the lower prices.