[SMM Analysis] Ningbo HRC Inventory Fluctuates Rangebound, Trading Turns Mediocre

[SMM Analysis] Ningbo HRC Inventory Fluctuates Rangebound, Trading Turns Mediocre

According to an SMM survey, SMM’s large-caliber HRC inventory in Ningbo stood at 327,900 mt as of 12.10, up 3,900 mt WoW.

This week HRC prices fluctuated downward; spot prices fell 40-90 yuan/mt WoW, and overall market sentiment stayed weak. By the 12.12 afternoon close, the most-traded HRC 2605 contract settled at 3,232 yuan/mt.

SMM’s survey also shows that in Ningbo’s spot market this week, mainstream HRC transaction prices dropped sharply; by the 12.12 afternoon close, late-session offers were 3,270-3,280 yuan/mt, down 40-50 yuan/mt from last Friday. Futures remained in the doldrums, spot trading turned sluggish, some traders cut offers early to move cargo, and turnover was moderate. Arrivals of mainstream resources followed normal schedules, DDH deliveries were also steady, so near-term supply pressure is not pronounced. Inventory rose slightly this week, but a short-term decline is still expected; however, the trend lacks staying power, and a buildup is forecast within four to five weeks.

SMM released its weekly HRC balance sheet: scheduled maintenance at mills increases in December, so HRC production is expected to fall MoM. This week SMM tallied 4.1177 million mt of HRC social inventory at 86 warehouses nationwide (large sample), down 90,500 mt (-2.15%) WoW and up 37.59% YoY. National destocking continued; by region, the Northeast, East China and Central China markets posted larger declines.

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