China HRC inventories extended declines amid falling supply and improving demand

SHANGHAI, Mar 19 (SMM)—China HRC stocks across social warehouses and steel makers extended declines this week.

SMM data showed that HRC stocks shrank 264,400 mt or 6.07% from the previous week and 26.27% from a year earlier to 4.09 million mt in the week ended March 18.

Inventories across social warehouses declined 155,900 mt or 4.97% week on week to 2.98 million mt. This was 18.53% lower than the same period last year. The decline in HRC social inventories expanded this week. Trades were active in the spot market as end user demand further recovered. Besides, smelters in north China have not fully resumed production yet and port transport remained suspended, which hindered shipments from plants to social warehouses.

Stocks at Chinese steel makers came in at 1.11 million mt, down 108,500 mt or 8.88% week on week and 41.22% year on year. Many smelters conducted maintenance this week, and this, combined with production restrictions in Tangshan, led to the sharp fall in HRC supply.

Positive fundamentals are expected to support HRC prices in the near term.