Posted on 23 Aug 2023
Chinese prices of hot-rolled coils (HRCs) lost some steam over August 14-18, while hot coil trading in the domestic spot market also fell slightly amid sluggish demand from end-users and traders, a market insider said.
As of August 21, China's national price of Q235 4.75mm HRC had declined to Yuan 3,948/tonne ($542.3/t) including the 13% VAT, down by Yuan 23/t from one week earlier, according to Mysteel's assessment.
Many traders lost confidence and trimmed their offering prices after noting the decline in HRC prices on the Shanghai Futures Exchange (SHFE), a Shanghai-based analyst said.
For example, the most-traded HRC contract for October delivery on SHFE closed the daytime trading session at Yuan 3,666/t on August 21, down by Yuan 9/t from the settlement price on August 14, according to the exchange's data.
High production from steelmakers also weighed on the prices, the analyst added. Total production of hot-rolled coils among the 37 Chinese flat steelmakers under Mysteel's regular tracking kept growing over August 10-16, rising by 29,500 tonnes or 0.9% on week to reach 3.1 million tonnes.
During the same survey period, hot-rolling capacity use among these sampled mills also climbed by 0.76 percentage point on week to 80.39%, according to Mysteel's data.
Most end-users procured only to fulfill their immediate demand, and many traders were cautious of buying, both leading to the lackluster trading activities in the market, he added.
As such, HRC stocks at trading houses across the 33 cities under Mysteel's tracking increased by 12,100 tonnes or 0.4% on week to 2.9 million tonnes as of August 17.
Meanwhile, as of August 16, HRC inventories held by the 37 surveyed mills Mysteel tracks eased by 4,100 tonnes or 0.4% on week to reach 854,000 tonnes.
Source:Mysteel Global
