SHANGHAI, Jun 12 (SMM) – Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China continued to trend lower this week, but stocks at steelmakers rose as some mills recovered from maintenance and as orders reduced after prices stemmed their strong rally.
SMM data showed that HRC stocks across social warehouses and steelmakers decreased 3.16% in the week ended June 11 to 3.59 million mt, marking the 13th straight week of declines.
The stocks were 16.35% higher than the same period last year, compared to an annual increase of 22.6% seen a week earlier.
HRC futures prices took a breather from their recent rally this week and hovered at highs, which brought caution to the physical market and deterred traders from placing orders to mills. Mills in north China, meanwhile, received fewer orders from the south as the price spreads were not wide enough.
Reduced orders, coupled with the recovery from maintenance led to the first weekly gain in HRC inventories at steelmakers over the past four weeks. Stocks at steel mills rose 1.77% to 1.01 million mt, compared with a 7.01% drop in the previous week, showed SMM data.
Overall HRC stocks managed to extend their decline this week as the increase in in-plant stocks was offset by a sharp loss in social inventories.
HRC stocks at social warehouses fell 4.97% this week to 2.58 million mt, larger than a 3.97% decline in the prior week as deliveries were disrupted by heavy rainfalls in some regions and as end-user demand remained robust.
A pause to the deliveries of northern resources to the southern markets also contributed to this week’s larger decline in social inventories.
