SHANGHAI, Aug 28 (SMM) — Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China extended declines this week, as consumption was strong.
SMM data showed that HRC stocks across social warehouses and steelmakers fell 0.79% in the week ended August 27 to 3.87 million mt, after a 0.86% decline in the previous week. The stocks were 14.9% higher than the same period last year.
Strong end-user consumption lowered HRC stocks at social warehouses by 1.87% this week to 2.66 million mt, marking the third consecutive week of falls.
China HRC inventories at social warehouses (Source: SMM)
The typhoon weather in north China slowed shipments from local steelmakers, and this, combined with muted trades, lifted HRC stocks at steel mills by 1.67% this week to 1.21 million mt.
China HRC inventories at steelmakers (Source: SMM)
Total HRC stocks continued to fall this week, boosting market sentiment, but the supply pressure is expected to increase in the near term as decent profits will encourage steel mills to step up production, and as demand is less strong than expected in a high season.
