According to SMM Steel on July 16, the total inventory of hot-rolled coil this week is 3.7685 million tons, with a month-on-month ratio of + 3.72% and a year-on-year ratio of + 10.74%. Since the end of June, the hot volume has accumulated for 4 consecutive weeks, and this week it is affected by the synchronous wide accumulation of the factory social library, and the overall accumulation range is higher than that of previous weeks.

Table 1: comparison of hot rolling inventory

Source: SMM Steel

Social inventory: 2.6852 million tons of hot rolling stock this week, with a month-on-month ratio of + 3.27% and + 11.52% compared with the same period last year. Recently, by the financial side, emotional side and macro positive stimulation, the market atmosphere is gradually heating up, hot spot prices continue to rise. Lead to the terminal fear of heights is strong, procurement enthusiasm and purchase volume are up to market expectations, the actual digestion of inventory is less, so the social treasury continues to accumulate this week.

Figure 1: social inventory trend chart

Source: SMM Steel

Inventory of the steel mill: this week, the hot rolling mill warehouse is 1.0833 million tons, with a month-on-month ratio of + 4.87% and + 8.84% compared with the same period last year. Affected by the overhaul and resumption of production of steel mills and the poor profit of coiling snails, the output of hot coils is increasing. Recently, due to the influence of high prices, the acceptance of price-locking resources in steel mills is relatively weak, and the transfer of factory depots to terminals and social repositories has been blocked, resulting in the accumulation of mills and warehouses this week.

Figure 2: inventory trend chart of steel mills

Source: SMM Steel

Generally speaking, although inventory has accumulated recently, the actual market pressure has not increased significantly, and even some southern markets are still in a state of tight resources, so it is OK to superimpose the actual demand of the current terminal, and the fundamentals are safe in the short term. it also forms a certain support for spot prices. At the same time, the current macro-environmental preferences, coupled with strong expectations, it is expected that the follow-up spot prices will still show a strong trend.