Posted on 13 Sep 2023
Production of hot-rolled coil (HRC) among the 37 Chinese flat steel producers under Mysteel's tracking declined during August 31-September 6 after four weeks of rises, falling by 1.4% or 46,200 tonnes on week to 3.15 million tonnes, according to the weekly survey.
During the survey week, some domestic mills had curtailed their HRC output as order quantities had decreased this month, while others conducted maintenance on their blast furnaces, according to survey respondents.
The hot-rolling capacity utilization rate among these surveyed mills had slipped by 1.18 percentage points on week to 80.6% over the survey period, Mysteel's data showed.
Despite the lower output, HRC stocks at commercial warehouses in the 33 cities Mysteel follows had mounted by 40,100 tonnes or 1.4% on week to 2.93 million tonnes as of September 7, hitting a six-month high, the data showed.
"End-users have little inclination to purchase HRC currently and so they stocked up just in small quantities," said a source based in East China. "Meanwhile, traders were more willing to sell off steel products at hand in a bid to reduce their risks," he added.
Another market source remarked that the contradiction between supply and demand was still significant, saying there was a gap between market expectations of demand and real demand.
"Demand for HRC has yet to show a marked improvement and the buoyant sales that usually happen in early autumn haven't arrived yet," a North China-based source agreed.
On the other hand, spot HRC prices have also been pressured by weak market fundamentals. As of September 11, China's national price of Q235 4.75mm HRC, for example, had lost some Yuan 46/tonne ($6.3/t) on week to reach Yuan 3,963/t including the 13% VAT, according to Mysteel's assessment.
Source:Mysteel Global
