[SMM Analysis] Shipment Pace Picks Up Slightly, Ningbo Inventory Fluctuates Rangebound

[SMM Analysis] Shipment Pace Picks Up Slightly, Ningbo Inventory Fluctuates Rangebound

According to the SMM survey, this week, the SMM broad-based inventory of HRC in Ningbo stood at 355,500 mt (as of August 27), up 10,300 mt WoW.

This week, HRC prices first declined and then rose, with spot prices adjusting slightly by 10-30 yuan/mt on a weekly basis. The market trading atmosphere remained moderately weak during the week, and end-user purchase willingness was average. By the afternoon close on August 28, the most-traded HRC 2510 futures contract closed at 3,385 yuan/mt.

Meanwhile, according to the SMM survey, in the Ningbo spot trading market this week, in terms of prices, the transaction prices of mainstream HRC resources declined slightly. By the afternoon of August 28, the closing spot price was 3,420-3,430 yuan/mt, down 10 yuan/mt from 3,440 yuan/mt last Thursday. In terms of transactions, futures fluctuated, and the overall market trading atmosphere remained weak. Sales at lower prices were moderate, while holding firm on prices still made sales difficult, resulting in average weekly transactions. In terms of arrivals, the shipment pace of mainstream resources slightly accelerated, and supply was relatively loose. In terms of inventory, this week, the HRC inventory in Ningbo accumulated slightly. Some traders saw an increase in local resource arrivals, while the arrival pace of external resources remained moderate. However, end-user purchase willingness remained weak, and order-taking was average, leading to rangebound inventory fluctuations. Looking ahead, price fluctuations in Ningbo are expected to remain relatively firm, and recent market sentiment has improved somewhat. It is anticipated that there will be a slight recovery in short-term demand. If the arrival volume of external resources is moderate next week, there will be a slight downside room for inventory, but the inventory inflection point has yet to appear.

This week, SMM released its weekly HRC balance data. This week, some steel mills in south China were still affected by maintenance, leading to a slight MoM decline in HRC production. This week, the SMM-tracked social inventory of HRC across 86 warehouses (a large sample) nationwide stood at 3.5659 million mt, up 142,200 mt MoM, or +4.15% MoM, and -26.74% YoY. This week, the national social inventory continued to accumulate, with the growth rate expanding once again. By region, east China, south China, and north China saw significant increases.

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