China HRC Stocks Down 80,600 mt on Week

SHANGHAI, Nov 12 (SMM) - SMM data showed that HRC stocks across social warehouses and steel makers fell 80,600 mt or 2.4% on the week, a decrease of 7.75% than a year ago, to 3.28 million mt in the week ended November 11.

The social and total HRC inventories both dropped more quickly this week, while in-plant inventory rose slightly. From the supply side, the output in east China picked up slightly, and south China also saw ramped up production amid loosening power rationing and end of maintenance. Only the output in north China dropped from a week ago. And in terms of demand, the market was in panic amid wild volatility of prices, and the traders in some regions rushed to sell off, especially east China. As such, the HRC inventory kept falling.

The inventory across social warehouses decreased 85,600 mt or 3.43% week on week to 2.41 million mt, which is 6.01% lower than a year ago.

The social HRC inventory declined at a faster pace this week, and the declines were mainly contributed by east China. The traders in Shanghai and Zhangjiagang lowered their offers to promote the sales, and the terminal sector also purchased more goods when the spot market saw wild fluctuations in prices. The social inventory in north, central and south-west China maintained normal speed of consuming goods. The inventory in south China rose slightly as the transaction in the region has been poor. In general, the social inventory continued to decline.

HRC stocks at social warehouses

The stocks at Chinese steel makers came in at 877,300 mt, up 4,800 mt or 0.55% week on week and down 12.21% year on year.

The in-plant inventories in east and south China were stable or rose slightly this week, except north China. The in-plant inventory rose slightly as a whole amid plummeting spot HRC prices, losses among traders, and broad bearish sentiment.

HRC stocks at steelmakers

The apparent consumption of HRC was still on the rise, while the supply and demand were both weak. The near-term HRC inventory is likely to sustain the downward trend should there be no palpable increase in supply.