China HRC inventories fell slower as high prices sidelined buyers

SHANGHAI, May 22 (SMM) – Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell slower this week, as buyers held back on procurement after prices surged on air quality control-driven production cuts in Tangshan and optimism surrounding China’s Two Sessions.

SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2% in the week ended May 21 to 4.17 million mt, smaller than the previous week’s decline of 4.17%.

The stocks have fallen for 10 consecutive weeks, and were 41.68% higher than the same period last year.

A slowdown in social inventory depletion contributed to the deceleration of overall inventory decline. This week, social inventories of HRC in China fell 1.97% to 3 million mt, compared to a drop of 5.98% in the prior week.

Meanwhile, stocks at steel mills shrank 2.07% to 1.18 million mt, after a moderate rebound of 0.77% last week. An increase in direct shipments to end-users lowered HRC stocks at steelmakers this week.