[SMM HRC Weekly Balance & Social Inventory Overview] Weak Supply and Strong Demand, Social Inventory Continues to Decline

Published: Mar 13, 2025 14:20

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[SMM HRC Weekly Balance & Social Inventory Analysis] Weak Supply and Strong Demand, Social Inventory Continues to Decline Environmental protection combined with new maintenance plans at some steel mills led to a significant reduction in HRC supply. During this period, HRC futures first dipped and then rebounded. The price increase stimulated purchasing enthusiasm in the market, resulting in weak supply and strong demand, with an expanded decline in social inventory. Looking ahead, additional maintenance plans are still expected at some steel mills, keeping supply pressure relatively small in the short term. End-use demand remains resilient, and nationwide social inventory is expected to continue declining in the short term...

Ø Weekly Balance of HRC

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

This week, total HRC inventory stood at 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 Production Continued to Decline WoW

This week, HRC production decreased WoW due to maintenance and environmental protection-driven production restrictions at some steel mills.

Ø Social Inventory of HRC Continued to Decline This Week

This week, SMM statistics showed that the social inventory of HRC across 86 warehouses nationwide (large sample) was 4.4704 million mt, down 85,500 mt WoW (-1.88%) but up 1.23% on a lunar YoY basis. Nationwide social inventory continued to decline this week, with the reduction expanding. By region, the South China and East China markets saw larger declines, while the Central, North, and Northeast China markets fluctuated rangebound. Specifically:

l [Shanghai] Inventory Increased in Shanghai This Week

This week, HRC inventory in Shanghai was 374,600 mt, up 23,900 mt WoW (+6.81%), with a YoY decline of 14.18% and a lunar YoY decline of 1.29%.

l [Lecong] Inventory in Lecong Continued to Decline

This week, HRC inventory in Lecong was 102,630 mt, down 47,000 mt WoW (-4.38%), with a lunar YoY increase of 33,700 mt (+3.40%).

l [Zhangjiagang] Inventory in Zhangjiagang Continued to Decline This Week

This week, HRC inventory in Zhangjiagang was 434,000 mt, down 13,000 mt WoW (-2.91%), with a YoY decline of 10.88% and a lunar YoY increase of 6.37%.

Environmental protection measures combined with new maintenance plans at some steel mills significantly reduced HRC supply. During the week, futures prices first fell and then rose, stimulating purchasing enthusiasm amid the price increase trend. With weak supply and strong demand, the reduction in social inventory expanded. Looking ahead, additional maintenance plans at steel mills are expected, keeping supply pressure relatively small in the short term. End-use demand remains resilient, and nationwide social inventory is expected to continue declining in the short term.

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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