Ø Weekly Balance of HRC
Ø HRC Total Inventory Accumulation Before and After Chinese New Year (Small Sample)
This week, HRC social inventory stood at 2.8399 million mt, up 9,900 mt WoW (+0.35%), down 7.78% YoY, and down 13.27% YoY on a lunar calendar basis.
Ø HRC Production Remained High This Week
No new maintenance was added this week, and steel mill production increased slightly. From late February to early March, some steel mills in north and south China are expected to undergo maintenance, limiting the short-term growth potential of HRC production.
Ø HRC Social Inventory Growth Slowed Significantly This Week
This week, SMM statistics showed that HRC social inventory across 86 warehouses nationwide (large sample) reached 4.4677 million mt, up 15,700 mt WoW (+0.35%), and down 9.86% YoY on a lunar calendar basis. In the third week after the holiday, national social inventory continued to build up, but the growth rate slowed significantly. By region, while south China and north-east China markets continued to see inventory buildup, east China, central China, and north China markets began destocking. Specifically:
l [Shanghai] Third Week After the Holiday: Shanghai HRC Inventory Declined WoW
This week, Shanghai HRC inventory stood at 378,900 mt, down 10,900 mt WoW (-2.80%), with a YoY decline of 21.21% on a solar calendar basis and 13.20% on a lunar calendar basis.
l [Lecong] Third Week After the Holiday: Lecong Inventory Continued to Build Up
This week, Lecong HRC inventory reached 103,040 mt, up 48,500 mt WoW (+4.71%), with a YoY increase of 87,600 mt (+8.50%) on a lunar calendar basis.
l [Zhangjiagang] Third Week After the Holiday: Zhangjiagang HRC Inventory Declined Rapidly
This week, Zhangjiagang HRC inventory stood at 423,000 mt, down 23,000 mt WoW (-5.16%), with a YoY decline of 11.88% on a solar calendar basis and 13.14% on a lunar calendar basis.
Currently, steel mills are maintaining high production enthusiasm, with HRC production remaining at elevated levels. During this period, futures prices bottomed out and rebounded, market trading sentiment improved, and end-use demand gradually resumed, leading to a notable improvement in market transactions. With strong supply and demand, social inventory continued to build up, but the growth rate narrowed significantly. Looking ahead, some steel mills are expected to initiate new maintenance plans, which may ease supply pressure. Meanwhile, end-use demand is being released steadily, and nationwide social inventory destocking is expected to accelerate in the short term.
