Posted on 18 Apr 2023
Prices of hot-rolled coil (HRC) in China's domestic market lost some ground over April 10-14, in sync with the fall in HRC futures prices on the Shanghai Futures Exchange (SHFE). Sluggish demand from end-users was blamed for the weakening coil prices, Mysteel Global learned.
As of April 14, China's national price of Q235 4.75mm HRC had slipped to Yuan 4,262/tonne ($620/t) including the 13% VAT, down by Yuan 54/t from one week earlier, according to Mysteel's assessment.
Many traders trimmed their offering prices 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 3,986/t on April 14, down by Yuan 76/t from the settlement price on April 7, according to the exchange's data.
Over April 6-12, production of hot coils among the 37 Chinese steelmakers Mysteel tracks had dropped to 3.2 million tonnes, down by 12,700 tonnes or 0.4 % on week. During the same survey period, hot-rolling capacity usage among the sampled mills also eased by 0.33 percentage point on week to 82.73%, according to Mysteel's data.
As for steelmakers, some mills trimmed their production, given the meagre margins they are currently earning and the sluggish demand from end-users, he commented.
Many end-users hesitated about procuring hot coils, out of fears that prices will decline further, while most traders adopted a pessimistic stance on coil prices, he added.
As of April 13, HRC stocks at trading houses across the 33 cities under Mysteel's tracking ended eight weeks of declines to rise by 24,300 tonnes or 1% on week to 2.4 million tonnes. HRC inventories held by the 37 surveyed mills also increased by 8,700 tonnes or 1% on week to 877,300 tonnes as of April 12.
Source:Mysteel Global
