SHANGHAI, May 29 (SMM) – Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China continued to trend lower this week, driven by a sharp decline in in-plant stocks as output reduced on maintenance and high raw material costs.
SMM data showed that HRC stocks across social warehouses and steelmakers decreased 4.72% in the week ended May 28 to 3.9 million mt, marking the 11th straight week of declines. The stocks were 30.38% higher than the same period last year.
Stocks at steel mills dropped 8.97% this week to 1.07 million mt, much larger than a 2.07% decline in the prior week. Aside from reduced production, increased shipments from northern mills also helped lower in-plant stocks of HRC.
For the same week, social inventories of HRC in China fell 3.01% to 2.82 million mt. The stocks at social warehouses fell slower in recent weeks, as volatile prices kept buyers cautious and deliveries from mills arrived.
Falling inventories and a steady demand outlook for June are expected to fuel upside in prices of HRC.