[SMM HRC Weekly Balance & Social Inventory Review] Production Surges, Social Inventory Begins to Accumulate

Published: Jan 9, 2025 11:32

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[SMM HRC Weekly Balance & Social Inventory Overview] Production Surged, Social Inventory Began to Accumulate This week, SMM statistics showed that the HRC social inventory across 86 warehouses nationwide (large sample) reached 2.9575 million mt, up 47,500 mt (+1.63% MoM), and down 12.21% YoY based on the lunar calendar. This week, the national social inventory began to see an inventory buildup. By region, the inventory buildup in south and east China was higher than in north, northeast, and central China. Specifically...

Ø Weekly Balance of HRC

Ø HRC Production Increased Significantly WoW

This week, some steel mills in north China and east China resumed production after completing rolling line and blast furnace maintenance. Coupled with the increase in the overall HRC production schedule of domestic steel mills in January, production increased significantly WoW this week.

Ø HRC Social Inventories Accumulated WoW

According to SMM statistics, HRC social inventories in 86 warehouses nationwide (large sample) reached 2.9575 million mt this week, up 47,500 mt WoW (+1.63%) and down 12.21% YoY based on the lunar calendar. Nationwide social inventories began to build up this week. By region, inventory buildup in south China and east China was higher than in north-east China, north China, and central China. Specifically:

l [Shanghai] Inventory Growth Expanded in Shanghai This Week

HRC inventories in Shanghai reached 259,200 mt this week, up 14,000 mt WoW (+5.71%), with a Gregorian YoY decline of 32.71% and a lunar YoY decline of 24.45%.

l [Lecong] Weak Demand and Strong Supply Led to Inventory Buildup in Lecong

HRC inventories in Lecong reached 56.42 mt this week, up 20,100 mt WoW (+3.56%), with a lunar YoY increase of 136,700 mt (+24.23%).

l [Zhangjiagang] Inventory Decline Narrowed Significantly in Zhangjiagang This Week

HRC inventories in Zhangjiagang reached 455,000 mt this week, down 3,000 mt WoW (-0.66%), with a Gregorian YoY decline of 9.72% and a lunar YoY increase of 2.71%.

l [Tangshan] HRC Inventories Continued to Decline in Tangshan This Week

HRC inventories in Tangshan reached 410,800 mt this week, down 10,600 mt WoW (-2.52%), with a YoY decline of 410,100 mt (-49.96%).

With some steel products resuming production after maintenance, HRC production increased significantly this week. As year-end approaches, coupled with prolonged weakness in futures, end-user purchasing enthusiasm has significantly declined. Overall, social inventories have accumulated. Looking ahead, according to the latest SMM survey, HRC production is expected to increase MoM this month. In the short term, HRC supply pressure remains high, and as the year-end nears, manufacturing demand is expected to weaken further. Nationwide social inventories are likely to continue building up next week.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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