SHANGHAI, Sep 17 (SMM) – SMM data showed that HRC stocks across social warehouses and steel makers fell 31,300 mt or 0.85% on the week, a decrease of 9.28% than a year ago, to 3.66 million mt in the week ended September 16.
HRC demand and output declined simultaneously this week. Some HRC mills in north China conducted maintenance on the blast furnace, and typhoon Chanthu affected the HRC demand in east China. The total HRC inventory kept falling, but in a slower pace.
Inventories across social warehouses decreased 6,500 mt or 0.23% week on week to 2.82 million mt. This was 0.52% lower than the same period last year.
The demand in east China was suppressed by the typhoon, and the pandemic in Fujian also weighed on the demand. The decline in social inventories slowed down amid stagnated market trade.
Stocks at Chinese steel makers came in at 834,800 mt, down 24,800 mt or 2.88% week on week and 30.1% year on year.
The output in some northern HRC steel dropped, leading to the lower in-plant stocks. The inventories at steel mills are expected to stay low.
HRC inventory declined slightly this week mainly due to the decreased supply. The regional demand was also curbed by the typhoon and pandemic. However, the impact was slight across the country. HRC users will restock before the Mid-Autumn Festival holiday amid the weakened impact of the typhoon and pandemic, which will boost the market sentiments. The production restrictions in steel mills may be strengthened in September and October, so the HRC supply will remain low.
HRC prices are expected to keep moving upward in late September.