According to SMM Steel, the total inventory of hot-rolled coil this week is 3.8553 million tons, with a month-on-month ratio of + 2.30% and a year-on-year ratio of + 12.78%. Total inventories continue to grow this week, but the growth rate has narrowed and the short-term disturbance to fundamentals is relatively limited.
Table 1: comparison of hot rolling inventory
Source: SMM Steel
Social inventory: 2.7182 million tons of hot rolling stock this week, + 1.23% month-on-month, + 11.20% compared with the same period last year. Recently, the macro side continues to be positive, market trading sentiment is warmer than last week, terminal purchases are also more volume than last week. Superimposed by the impact of flood, some areas of the board rolled into the reservoir slowly, leading to a narrowing of the accumulation range this week. However, due to the terminal demand affected by fear of heights, the release is not as expected, so this week still continues the trend of accumulation.
Figure 1: social inventory trend chart
Source: SMM Steel
Steel mill inventory: this week's hot rolling mill warehouse 1.1371 million tons, month-on-month + 4.96%, year-on-year + 16.72%. Driven by the gradual increase in coil profits, steel mill production is actively higher, hot coil output is also increasing, coupled with the recent flood, steel plant resources are limited to a certain extent, so the factory warehouse continues to increase this week, and the growth rate is larger than last week.
Figure 2: inventory trend chart of steel mills
Source: SMM Steel
Generally speaking, although hot coil inventory continues to accumulate recently, the accumulation rate is relatively slow, which is not enough to put pressure on steel mills and traders in the short term. In addition, the current macro continuing preference, positive market sentiment, and there are no signs of significant weakening in fundamentals, so there is still a certain degree of support for spot prices, and it is expected that there will still be a strong shock trend in the short term.
