[SMM HRC Weekly Balance & Social Inventory Overview] Supply Resistance Significantly Eased, Social Inventory Finally Declined!

Published: Mar 6, 2025 14:49

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[SMM HRC Weekly Balance & Social Inventory Overview] Supply Pressure Eases Significantly, Social Inventory Finally Declines! With environmental protection measures combined with new maintenance plans at some steel mills, HRC production saw a noticeable reduction. Futures fluctuated downward this week, and the market mainly focused on purchasing as needed. Supply remained weak, and social inventory declined slightly MoM. Looking ahead, additional maintenance plans are expected at some steel mills, keeping supply pressure relatively small in the short term. After the Two Sessions, end-use demand is expected to steadily recover, and nationwide social inventory is likely to continue declining in the short term.

Ø Weekly Balance of HRC

Ø HRC Total Inventory Accumulation Before and After Chinese New Year (Small Sample)

This week, the total HRC inventory was 4.0775 million mt, down 15,000 mt WoW (-0.37%) and -8.65% YoY, but up 0.58% on a lunar YoY basis.

Ø Significant Decline in Production This Week

This week, new equipment maintenance at steel mills in central and north China, combined with the impact of environmental protection-driven production restrictions in some regions, led to a WoW decline in HRC production.

Ø Narrow Decline in HRC Social Inventory This Week

This week, SMM statistics showed the HRC social inventory across 86 warehouses nationwide (large sample) at 4.5559 million mt, down 19,700 mt WoW (-0.43%) and -0.94% on a lunar YoY basis. Nationwide social inventory began to decline this week. By region, while central and north-east China saw slight inventory buildup, east, north, and south China experienced inventory reductions. Specifically:

l [Shanghai] Continued Inventory Reduction in Shanghai This Week

This week, Shanghai's HRC inventory stood at 350,700 mt, down 12,200 mt WoW (-3.36%), with a Gregorian YoY decline of 24.76% and a lunar YoY decline of 10.60%.

l [Lecong] Slight Inventory Reduction in Lecong in the Fifth Week After the Holiday

This week, Lecong's HRC inventory was 107,330 mt, down 4,100 mt WoW (-0.38%), with a lunar YoY increase of 131,400 mt (+13.95%).

l [Zhangjiagang] Slight Inventory Decline in Zhangjiagang This Week

This week, Zhangjiagang's HRC inventory was 447,000 mt, down 7,000 mt WoW (-1.54%), with a Gregorian YoY decline of 13.87% and a lunar YoY increase of 4.20%.

l [Tangshan] Slight Inventory Decline in Tangshan This Week

This week, Tangshan's HRC inventory was 739,300 mt, down 14,000 mt WoW (-1.86%), with a YoY decline of 376,600 mt (-33.75%).

Environmental protection measures combined with new maintenance plans at some steel mills led to a significant reduction in HRC production. During the week, futures fluctuated downward, and the market mainly engaged in purchasing as needed. With weak supply, social inventory saw a WoW reduction. Looking ahead, additional maintenance plans at steel mills are expected, keeping supply pressure relatively small in the short term. After the Two Sessions, end-use demand is expected to gradually recover. In the short term, nationwide social inventory is expected to continue declining.

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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