China HRC inventories declined for 1st time since the Lunar New Year holiday

SHANGHAI, Mar 19 (SMM) – Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell this week, marking the first week-on-week decrease since the Lunar New Year holiday, as demand recovered and mills were still undergoing maintenance.

SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2.28% from a week ago to 5.65 million mt as of Thursday March 19.

This was 67.08% higher than the same period after the Lunar New Year holiday last year, suggesting that the stocks stay at record highs and that prices remain under strong inventory pressure. The SMM survey also showed that there are still a large number of HRC stranded at ports.

This week, HRC inventories at social warehouses shrank 1.67% to 4.06 million mt, falling for the first time since the Lunar New Year holiday, as mills slowed their deliveries to social warehouses after in-plant stocks began to fall last month and as demand picked up following the resumption of end-users.

Stocks at Chinese steelmakers fell for a fourth straight week this week, decreasing 3.79% to 1.59 million mt, smaller than a decline of 9.96% in the prior week. This was 62.87% higher than the same period after the Lunar New Year holiday last year, even as inventories at most mills have declined to normal levels.

Maintenance continued at some mills, contributing to the fall in inventories this week.