Posted on 12 Apr 2023
Prices of hot-rolled coil (HRC) in China's domestic market declined over April 3-7, in line with the drop in HRC futures prices on the Shanghai Futures Exchange (SHFE). Dull demand from end-users was blamed for the drop in the coil prices, a market insider said.
As of April 7, China's national price of Q235 4.75mm HRC had softened to Yuan 4,316/tonne ($627.5/t) including the 13% VAT, down by Yuan 107/t from one week earlier, according to Mysteel's assessment.
Many traders were willing to compromise on their prices to facilitate sales, after noting the drop in HRC futures prices on the SHFE, a Shanghai-based analyst said.
The exchange's most-traded HRC contract for October delivery closed the daytime trading session at Yuan 4,072/t on April 7, down by Yuan 164/t from the settlement price of March 31, according to the exchange's data.
Over March 30-April 5, production of hot coils among the 37 Chinese steelmakers Mysteel tracks had increased by 81,000 tonnes or 2.6% on week to 3.25 million tonnes, as many mills switched production from long steel products to flat steel items. During the same survey period, hot-rolling capacity usage among the sampled mills also increased by 2.07 percentage points on week to 83.06%, according to Mysteel's data.
Most end-users procured only to fulfill immediate production demand, while many traders were also cautious about buying. The market sentiment turned bearish as steel demand was lower than expected during the traditionally robust period for steel consumption, he added.
As of April 6, HRC stocks at trading houses across 33 cities under Mysteel's tracking declined at a slower pace of 1.4% on week to 2.4 million tonnes.
HRC inventories held by the 37 surveyed mills slipped by 0.8% or 7,400 tonnes on week to 868,600 tonnes as of April 5.
Source:Mysteel Global
