SHANGHAI, May 21 (SMM)—China HRC stocks across social warehouses and steel makers shrank slower this week, but it was better than expected.
SMM data showed that HRC stocks declined 21,200 mt or 0.61% from the previous week to 3.46 million mt in the week ended May 20. This was 23.99% lower compared with the same period last year.
Inventories across social warehouses shrank 10,700 mt or 0.42% week on week to 2.54 million mt. This was 24.15% lower than the same period last year. HRC prices plunged this week, driving up wait-and-see sentiment among downstream users. Social inventories fell slightly amid end-user demand.
Stocks at Chinese steel makers came in at 920,500 mt, down 10,500 mt or 1.13% week on week, and 23.57% year on year. HRC output increased for eight consecutive weeks. The sharp drop in HRC prices put pressure on steel mills to receive orders. But shipments of previous orders out of mills were stable this week, which resulted in the slight decline in in-plant inventories.
HRC prices have given up previous gains recently. Spot prices have fallen to or even below the cost line of some traders, and may likely to halt declines in the near future. In the medium and long term, prices are expected to strengthen considering strong raw materials prices.