[SMM HRC Weekly Balance & Social Inventory Review] Demand Release Remains Resilient, Social Inventory Accumulation Does Not Continue

【SMM Weekly HRC Balance & Social Inventory Overview】Demand Remains Resilient; Social Inventory Buildup Does Not Persist

Ø  Weekly HRC Balance

Ø  This Week's HRC Production Fluctuated Rangebound

This week, some steel mills in east and north China resumed production after maintenance, while others are still undergoing or about to start maintenance. Overall, HRC production fluctuated rangebound WoW.

Ø  This Week's HRC Social Inventory Declined WoW

This week, SMM statistics show that the HRC social inventory across 86 warehouses nationwide (large sample) stood at 2.9777 million mt, down 40,900 mt WoW (-1.35%) and down 20.90% YoY (lunar calendar). National social inventory declined this week. By region, apart from accelerated inventory buildup in the north China market, the south, central, east, and north-east China markets all saw destocking. Specifically:

l  【Shanghai】Shanghai Inventory Continued to Decline This Week

This week, Shanghai's HRC inventory stood at 23.94 mt, down 17,000 mt WoW (-6.63%), up 41.75% YoY (solar calendar), and down 37.85% YoY (lunar calendar).

l  【Lecong】End-User Processing Remained Moderate; Lecong Inventory Slightly Reduced

This week, Lecong's HRC inventory stood at 54.95 mt, down 900 mt WoW (-0.16%), up 196,500 mt YoY (lunar calendar), with a YoY increase of 35.76% (lunar calendar).

l  【Zhangjiagang】Zhangjiagang Inventory Decline Accelerated This Week

This week, Zhangjiagang's HRC inventory stood at 485,000 mt, down 15,000 mt WoW (-3.00%), with YoY declines of 6.19% (solar calendar) and 11.50% (lunar calendar).

l  【Tangshan】Tangshan HRC Inventory Continued to Increase This Week

This week, Tangshan's HRC inventory stood at 431,000 mt, up 35,500 mt WoW (+8.98%), down 301,900 mt YoY (-41.19%).

With some steel mills completing maintenance, HRC production slightly increased WoW this week. During this period, futures fluctuated rangebound. At year-end, end-user demand continued to release, coupled with active shipments by traders, leading to a continued decline in social inventory overall. Looking ahead, with some steel mills planning maintenance, short-term HRC production is expected to fluctuate rangebound. Manufacturing demand is anticipated to weaken gradually, and national social inventory may face a buildup risk next week.​