China HRC inventories fell slower this week

SHANGHAI, Apr 9 (SMM)—China HRC stocks across social warehouses and steel makers fell slower this week due to the Qingming holiday and as trades weakened amid high prices.

SMM data showed that HRC stocks shrank 134,300 mt or 3.6% from the previous week and 36.34% from a year earlier to 3.6 million mt in the week ended April 8.

Inventories across social warehouses declined 56,100 mt or 2.09% week on week to 2.63 million mt. This was 35.14% lower than the same period last year. Trades weakened after HRC prices registered new highs, and this, combined with rising HRC arrivals at some markets, resulted in the narrower decline in HRC social inventories this week.

Stocks at Chinese steel makers came in at 966,300 mt, down 78,200 mt or 7.49% week on week and 39.4% year on year. HRC output in Tangshan remained low due to local production restrictions, and this, together with faster shipments from plants to social warehouses, led to the drop in HRC in-plant inventories.

High HRC prices deterred users from purchasing. But in the medium and long term, HRC prices are likely to continue to increase as its supply will remain subdued due to strict production restrictions in Tangshan while end-user demand will sustain.