SHANGHAI, Oct 22 (SMM) – SMM data showed that HRC stocks across social warehouses and steel makers fell 118,600 mt or 3.31% on the week, a decrease of 12.90% than a year ago, to 3.46 million mt in the week ended October 21. The inventory of HRC fell significantly mainly due to the output dropped sharply in north China under the policy restrictions.
The inventory across social warehouses decreased 104,100 mt or 3.84% week on week to 2.61 million mt. This was 9.22% lower than the same period last year. The social inventory dropped most significantly in south China mainly because the demand recovered after the power rationing eased.
The stocks at Chinese steel makers came in at 856,000 mt, down 14,500 mt or 1.67% week on week and 22.47% year on year. The in-plant inventory declined slightly as the major steel mills in south China increased the production.
The total HRC inventory dropped significantly this week, as the output in north China declined sharply under the dual control of energy consumption, the Winter Olympics preparation, and the environmental protection inspections. At the same time, the demand recovered as the power rationing eased in some regions. However, the reduction in the inventory was narrower than tha in the supply, which indicates that the HRC demand remains weak.
The HRC inventory is expected to decline further next week amid the weak supply and demand.