HRC inventories rose for 4 weeks

SHANGHAI, Jan 17 (SMM) – With high profits encouraging mills to step up production and demand faltering in the run-up to the Chinese New Year holiday, inventories of hot-rolled coil (HRC) in China are growing at a faster pace, indicating mounting downward pressure on spot prices.

SMM data showed that stocks of HRC across social warehouses and steelmakers in China increased 6.8% to 2.74 million mt in the week ended January 16, after an increase of 4.1% in the previous week. The stocks have risen for four consecutive weeks.

Compared to the same period before the Chinese New Year holiday last year, the stocks were 4.7% lower, much smaller than a spread of 11.5% a week ago.

This week, HRC stocks across social warehouses climbed 8.4% to 1.86 million mt, and those at steel mills increased 3.4% to 878,100 mt.

A separate SMM survey showed that Chinese steelmakers plan to produce 9.7 million mt of hot-rolled coils and plates in January, up 14.12% from 8.5 million mt for the same month of 2019.