China HRC inventories extended decline on strong demand in the north

SHANGHAI, Apr 3 (SMM) – Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell for a third straight this week, as demand from north China was strong.

SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2.2% in the week ended April 2 to 5.45 million mt, 73.62% higher than the same period after the Lunar New Year holiday last year. The stocks fell 1.38% in the prior week.

Social inventories fell 1.21% to 4.01 million mt, while stocks at steel mills declined 4.84% to 1.44 million mt.

With Shanghai HRC futures on track for its third straight week of losses as the global spread of Covid-19 pandemic shows no signs of slowing, traders in the physical market rushed to discharge their cargoes and spot prices in China tumbled.

Prices in east and south China have slipped to three-year lows, while prices in north China showed some stabilisation this week as end-user demand there was stronger. SMM learned that northern steelmakers and traders saw brisk sales this week.