Posted on 19 Feb 2024
Production of hot-rolled coils (HRCs) among the 37 Chinese flat steel producers Mysteel regularly monitors registered 3.156 million tonnes during the Chinese New Year (CNY) holiday over February 10-17, largely flat from the output of 3.158 million tonnes over February 5-9, the results of Mysteel's production survey show.
The hot-rolling capacity utilization rate among these sampled mills remained stable during the survey period, dipping by just 0.05 percentage point to average 80.63% over the CNY break, the survey has found.
Against the backdrop of slack downstream demand for hot coils and thin profit margins the mills were bearing during the holiday, most steel mills chose to just maintain normal production of hot coils instead of actively raising their output of the flat product, market sources noted.
China's hot coil market basically turned quiet around the holiday break, as most domestic traders and end-users halted operations to enjoy the long holiday, and logistics also slowed, Mysteel Global noted.
Under these circumstances, HRC inventories at both the 37 surveyed mills and at commercial warehouses in 33 cities under Mysteel's tracking continued to increase during the holiday, with stocks held by mills jumping by 14.3% from February 9 to 975,800 tonnes as of February 16, while those piled at the warehouses also mounted by 14.33% to reach 2.91 million tonnes by the same day.
Regarding the price trend, Mysteel predicted that China's HRC prices are likely to strengthen after the CNY holiday, primarily on the back of the higher prices of steelmaking raw materials and favorable policies from the country's central government.
As of 15:00 Beijing time on February 18, the first working day after China's CNY break, the country's spot price of Q235 4.75mm HRC under Mysteel's assessment came in at Yuan 4,101/tonne ($570.1/t) including the VAT, higher by 0.6% from February 9.
China's spot HRC prices around the CNY in recent four years (Yuan/tonne)
Year | Price before the CNY | CNY holiday | Prices after the CNY | |||
2021 | Feb 10 | Feb 11-17 | Feb 18 | Feb 25 | Mar 4 | Mar 11 |
4,516 | 4,661 | 4,870 | 4,964 | 4,892 | ||
2022 | Jan 30 | Jan 31-Feb 6 | Feb 7 | Feb 14 | Feb 21 | Feb 28 |
4,914 | 5,011 | 5,073 | 5,031 | 5,010 | ||
2023 | Jan 20 | Jan 21-27 | Jan 28 | Feb 6 | Feb 13 | Feb 20 |
4,223 | 4,260 | 4,211 | 4,214 | 4,286 | ||
2024 | Feb 9 | Feb 10-17 | Feb 18 | Feb 25 | Mar 3 | Mar 10 |
4,077 | 4,101 | - | - | - | ||
Source: Mysteel
Source:Mysteel Global
