SHANGHAI, Nov 27 (SMM) – Arrivals of hot-rolled coil from key steelmakers to major steel consumption areas are expected to extend decline this week as some deliveries remained en route after the easing of cargo blockage at ports and as lower prices kept some traders from purchasing.
An SMM survey showed that HRC arrivals in Shanghai, Lecong, and Tianjin in the week ending November 29 are estimated to fall 22,000 mt, or 20%, from a week earlier and to stand at 86,000 mt.
Relatively higher prices and margins in north China made steelmakers less willing to ship cargoes to the south, which also accounted for the smaller arrivals.
HRC arrivals in Shanghai are expected to shrink 17,000 mt week on week to 23,000 mt, the lowest level this year. This, coupled with current low inventories and a continued shortage of some specifications, will support fundamentals and spot prices this week.
Steelmakers including Yanshan Iron and Steel, Tonghua Iron & Steel, and Benxi Iron & Steel reduce shipments to Shanghai this week.
In Lecong of Guangdong province, HRC arrivals are likely to rise 5,000 mt on the week to 52,000 mt, but this remained at low levels and will unable to address local shortage of specifications. Ramped-up operation at construction sites before year-end boosted demand for steel products and will continue to prop up spot prices of HRC this week.
SMM learned that Jiangsu Shagang and Benxi Iron & Steel lower their deliveries to Lecong this week.
North China’s Tianjin market is expected to see stable arrivals of HRC this week, which are under long-term purchasing contracts and stood at 11,000 mt. This will keep fundamentals stabilised.
However, SMM warns downside risk in HRC prices next week as cargoes en route will arrive at major consumption markets and ease supply tightness.