Market Stagnated during CNY Holiday with HRC Inventory Accumulating Sharply in January

SHANGHAI, Mar 2 (SMM) - As of February 2, social inventory of HRC stood at 3.08 million mt, up 91.61% MoM and 16.98% YoY. Inventories across Chinese social warehouses totalled 1.12 million mt, up 19.59% MoM and 13.36% YoY.

The HRC output in January increased slightly compared with the previous month as the impact of maintenance eased. In addition, the bullish sentiment encouraged steel mills to produce actively. Coupled with the cold market and halted logistics services caused by the Chinese New Year, both social inventory and in-plant inventory increased slightly.

Looking at the follow-up stage, on the supply side, the output in February may further increase. On the demand side, due to the early Chinese New Year holiday and the cold post-holiday weather in the north, it will take time for the overall demand to resume in February. It is expected that the HRC inventory in February may drop slightly.