SHANGHAI, May 28 (SMM)—China HRC stocks across social warehouses and steel makers rebounded this week as apparent consumption weakened further.
SMM data showed that HRC stocks expanded 31,200 mt or 0.9% from the previous week to 3.49 million mt in the week ended May 27. This was 21.5% lower compared with the same period last year.
Inventories across social warehouses shrank 7,600 mt or 0.3% week on week to 2.53 million mt. This was 22.22% lower than the same period last year. HRC prices continued to fall recently, while end-user demand improved steadily, which led to the slight decline in social inventories. Traders mostly expected that end-user procurements would increase as HRC prices hit the bottom.
Stocks at Chinese steel makers came in at 959,300 mt, up 38,800 mt or 4.21% week on week, and 19.53% year on year. HRC output increased for the ninth consecutive week, and orders at steel makers weakened as HRC prices declined.
HRC output is likely to shrink as SMM learned that five HRC production lines will be under maintenance in June, which is expected to affect output by about 650,000 mt. End-user demand remained high.
