SHANGHAI, Sep 24 (SMM) - SMM data showed that HRC stocks across social warehouses and steel makers rose 14,000 mt or 0.38% on the week, but a decrease of 9.61% than a year ago, to 3.67 million mt in the week ended September 23.
The HRC supply was basically stable this week as it was less affected by the production curtailment. The power rationing also suppressed downstream demand. Hence the overall HRC inventory is hard to drop amid the weakened supply and demand.
Inventories across social warehouses increased 5,100 mt or 0.18% week on week to 2.83 million mt. This was 1.21% lower than the same period last year.
The social inventory of HRC increased slightly this week, mainly due to severe power rationing in several important HRC markets in south and east China. The demand of downstream tube mills and processing plants was significantly suppressed, and the market transactions were stagnated.
Stocks at Chinese steel makers came in at 843,700 mt, up 8,900 mt or 1.07% week on week but down 29.67% year on year.
The total HRC output declined slightly this week. The output dropped in east and north China, but increased in south China. The total in-plant inventory of HRC increased slightly, with the increment in south China most significant. The HRC inventory is expected to fluctuate at a lower level.
The total HRC inventory rebounded. The overall supply stood stable as the output in south China increased, while the output in east and north China declined. At the sametime, the strengthened power rationing in some regions suppressed the HRC demand, and the decline in the inventory was stagnated. The HRC demand recovery is slower than expected, and the prices lack upward momentum, so the prices fluctuated widely. The price increase is expected to be limited amid the flat demand in the short term.