Posted on 25 Apr 2023
Prices of hot-rolled coil (HRC) in China's domestic market declined during April 17-23, undermined by the mismatch between supply and demand, with the national price of Q235 4.75mm HRC dropping to Yuan 4,089/tonne ($592.6/t) including the 13% VAT as of April 23, down by Yuan 161/t from April 17, according to Mysteel's assessment. Sunday was a substitute working day in lieu of China's Labor Day holiday over April 29-May 3.
Many traders trimmed their offering prices after noting the softening HRC futures prices on the Shanghai Futures Exchange (SHFE) and the bearish sentiment in the market, a Shanghai-based analyst said.
The exchange's most-traded HRC contract for October delivery closed the daytime trading session at Yuan 3,883/t on April 21, lower by Yuan 115/t from the settlement price on April 14, according to the exchange's data.
During the week, many steelmakers chose to trim or halt their production and conduct maintenance work instead, given the dull demand in the market and the meagre or negative profit margins they could currently earn, he added.
Over April 13-19, production of hot coils among the 37 Chinese steelmakers Mysteel tracks had fallen to 3.2 million tonnes, down by 63,500 tonnes or 2% on week. During the same survey period, hot-rolling capacity usage among the sampled mills also slipped by 1.62 percentage points on week to 81.11%, according to Mysteel's data.
Most market participants held a cautious stance regarding buying, with most end-users procuring only to meet immediate production demand and many traders being unwilling to procure coils for fear that prices will decline further.
As of April 20, HRC stocks at trading houses across the 33 cities under Mysteel's tracking gained for the second week by another 27,300 tonnes or 1.1% on week to reach 2.4 million tonnes. HRC inventories held by the 37 surveyed mills increased for the second week by another 16,100 tonnes or 1.8% on week to 893,400 tonnes as of April 19.
Source:Mysteel Global
