China HRC inventories expanded 535,000 mt to 4.08 million mt this week

SHANGHAI, Feb 18 (SMM)—China HRC stocks across social warehouses and steel makers built up during the Chinese New Year (CNY) holiday.

SMM data showed that HRC stocks surged 535,000 mt or 15.11% from the previous week, and 10.74% from a year earlier, to 4.08 million mt in the week ended February 18.

Inventories across social warehouses expanded 347,400 mt or 15.06% week on week to 2.65 million mt. This was 10.81% higher than the same period last year. Robust orders encouraged some end users to operate normally during the CNY holiday or resume earlier. Social inventory buildup after this CNY was more moderate than previous years due to strong demand.

Stocks at Chinese steel makers came in at 1.42 million mt, up 187,500 mt or 15.21% week on week and 10.61% year on year. Most of the HRC makers operated at full capacity during the holiday as they received robust orders before CNY.

HRC social inventories are expected to continue to rise for 1-2 weeks as transport and warehouses resume, but fast-growing demand is likely to support HRC prices.