SHANGHAI, Apr 16 (SMM) – The downtrend in inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China accelerated this week, as demand in infrastructure and machinery picked up significantly after Beijing introduced a raft of measures to prop up its economy and offset the fallout from the coronavirus pandemic.
SMM data showed that HRC stocks across social warehouses and steelmakers decreased 4.56% in the week ended April 16 to 5.02 million mt, marking a fifth straight week of decline and larger than a 3.59% fall in the previous week.
The stocks were 67.98% higher than the same period last year.
For the same week, social inventories fell 4.05% to 3.72 million mt, while stocks at steel mills declined 5.98% to 1.3 million mt.
Continued inventory decline and optimism that Beijing’s stimulus efforts would offer long-term support to demand drove traders to be unwilling to lower their quotes, while upside in prices is limited by inventories that remain high on a year-over-year basis.
HRC spot prices in China are expected to remain rangebound in the short term.