Posted on 06 Jun 2023
Prices of hot-rolled coil (HRC) in China's domestic market increased over May 29-June 2, in line with the rise in HRC futures prices on the Shanghai Futures Exchange (SHFE). The improving sentiment in the market gave a boost to the prices, a market insider said.
As of June 2, China's national price of Q235 national price of Q235 4.75mm HRC had grown to Yuan 3,808/tonne ($627.3/t) including the 13% VAT, up by Yuan 46/t from one week earlier.
Many traders gained confidence and lifted their offering prices after noting the rise in HRC prices on the SHFE, a Shanghai-based analyst said.
The SHFE's most-traded HRC October contract grew by Yuan 160/t from the settlement price on May 26 to Yuan 3,722/t when ending the daytime trading session on June 2.
Production of hot coils among the 37 Chinese steelmakers Mysteel tracks had dropped to 3.1 million tonnes over May 25-31, down by 52,500 tonnes or 1.7 % on week, while hot-rolling capacity usage among the sampled mills also slipped by 1.34 percentage points on week to 79.21%.
Many end-users were willing to take some tonnage when the coil prices have shown a tendency to stabilize, and many traders were active in buying after noting the continuous decline in HRC stocks at the warehouses, he added.
Nonetheless, given the improving sales, the HRC stocks at trading houses across the 33 cities under Mysteel's tracking had declined for the second week by another 85,300 tonnes or 3.1% to 2.7 million tonnes as of June 1. Meanwhile, HRC inventories held by the 37 surveyed mills eased by 1,900 tonnes on week to 872,100 tonnes as of May 31.
Meanwhile, Shagang Group, China's largest privately owned steelmaker, announced on June 1 that it is cutting its domestic HRC prices by Yuan 250/t and heavy plate prices by Yuan 200/t for current month sales, the company's second successive monthly reduction, Mysteel Global notes.
Source:Mysteel Global
