SHANGHAI, Nov 22 (SMM) – Social inventories of hot-rolled coil (HRC) in China trended lower for a sixth straight week, as demand ramped up further after prices of ferrous futures jumped on the issuing of smog alerts across northern regions and mine accidents.
SMM data showed that stocks of HRC across social warehouses decreased by 4.7% from a week ago to 1.77 million mt as of Thursday November 21.
There were still cargoes stranded at the port of Baiyuquan which has yet to fully recover from maintenance, and this limited arrivals at social warehouses and contributed to the inventory decline.
This week, HRC inventories across Chinese steelmakers fell for a third straight week, declining 2% from a week ago to 827,500 mt, as demand remained robust.
Overall HRC stocks across social warehouses and steel mills in China came in at 2.59 million mt as of November 21, down 3.8% from a week ago and 18.6% from a year ago.
The week-on-week decrease in overall HRC stocks was smaller than a drop of 5.9% in the previous week, as limited availability of sellable resources held traders from discharging cargoes and improved profits encouraged steelmakers to step up production.
Supply tightness across southern markets is unlikely to ease in the short term, which will remain supportive of spot prices, but there are chances of brief downward price correction in the rapidly rising market.