Posted on 30 Jan 2024
Production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors reached 3.1 million tonnes during the week of January 22-26, rising by 159,200 tonnes or 5.4% on week and ending the previous three weeks of declines, the results of Mysteel's weekly production survey show.
Accordingly, the hot-rolling capacity utilization rate among the 37 mills also climbed by 4.07 percentage points on week to average 79.13% last week, the survey found.
Behind the on-week rise in hot coil output was the fact that some steel producers in North, East and Central China resumed operations from maintenance stoppages during the survey period, survey respondents noted.
In parallel, most Chinese steelmakers maintained their normal pace of hot coil delivery, with the result that HRC stocks at the 37 surveyed mills fell by another 2.8% on week to sit at 790,200 tonnes as of January 25.
On the other hand, the appetite of hot coil buyers has weakened gradually with the traditional Chinese New Year holiday starting less than two weeks away on February 10. In tandem, inventories of the flat product at commercial warehouses in 33 cities under Mysteel's tracking mounted for the third straight week by another 2.6% on week to reach 2.29 million tonnes as of January 25.
During last week, prices of steelmaking raw materials in China found support from positive news for the country's macro-economy, which accordingly pushed steel product prices higher including those of HRC.
As of January 26, the spot price of Q235 4.75mm hot-rolled coil under Mysteel's assessment was at Yuan 4,111/t ($572.5/t) including the VAT, up by Yuan 38/t or 0.9% on week. On the Shanghai Futures Exchange the same day, the most-traded HRC futures contract for May delivery had also moved higher by Yuan 73/t or 1.7% from the January 19 settlement price to close the daytime trading session at Yuan 4,102/t.
Source:Mysteel Global
