China HRC inventories shrank to 3.48 million mt this week

SHANGHAI, May 14 (SMM)—China HRC stocks across social warehouses and steel makers declined this week as prices hiked.

SMM data showed that HRC stocks declined 77,400 mt or 2.18% from the previous week to 3.48 million mt in the week ended May 13. This was 27.05% lower compared with the same period last year.

Inventories across social warehouses shrank 24,200 mt or 0.94% week on week to 2.55 million mt. This was 27.64% lower than the same period last year. On the one hand, as output at steel makers continued to rise, in-plant inventories were shipped to social warehouses. On the other hand, spot trades were active this week as HRC prices soared, and this, together with better-than-expected post-holiday restocking demand, led to the slight decline in social inventories.

Stocks at Chinese steel makers came in at 931,100 mt, down 53,300 mt or 5.41% week on week, and 25.36%% year on year. Although output extended gains recently, steel mills received ample orders against the backdrop of surging HRC prices, and this accelerated shipments from mills to social warehouses.

An SMM survey showed that 35 steel makers in China plan to produce a total of 11.44 million mt of hot-rolled coils and plates in May, up 9.8%, or 1.02 million mt, from the realised output in April. However, rising raw materials prices have already driven some downstream plants to postpone or even suspend production.