Posted on 09 Apr 2024
Output of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors increased during April 1-5, gaining by another 36,100 tonnes or 1.12% on week to reach 3.26 million tonnes, Mysteel's latest weekly production survey shows. The rise represented the fifth straight weekly increase and occurred despite much of China being on holidays over April 4-6 for Qingming Festival celebrations.
Similarly, the hot-rolling capacity utilization rate among the 37 mills also increased for a fifth week last week to average 83.18%, higher by 0.92 percentage point on week, the survey found.
Some steel producers in North China resumed operations during the sample period after completing maintenance stoppages, leading to the on-week rise of HRC output, survey respondents said.
Nevertheless, HRC stocks at the 37 surveyed mills and at commercial warehouses in 33 cities under Mysteel's tracking both declined last week, reflecting the return of normal deliveries, and recovered downstream consumption of the flat product, sources said. Inventories held by the former lost 1.56% on week to 886,300 tonnes as of April 4, while those of the latter dipped by 1.01% on week to 3.38 million tonnes as of the same day.
Besides, there was a certain degree of replenishment demand for hot coils before the three-day holiday, which would have contributed to the on-week decrease of HRC inventories too, respondents suggested.
In parallel, HRC prices in both the spot and futures markets ticked up last week, partly due to improved business sentiment. After showing contraction for the five previous months, China's Purchasing Managers' Index for March finally tipped into expansion, with the index up to 50.8, as reported.
On the Shanghai Futures Exchange, the most-traded HRC futures contract for October delivery closed the daytime trading session at Yuan 3,659/tonne ($506/t) on April 3, higher by Yuan 40/t or 1.11% from the March 29 settlement price.
On the same day, China's spot price of Q235 4.75mm hot-rolled coil under Mysteel's assessment had also gained Yuan 11/t or 0.29% from March 29 to reach Yuan 3,754/t including the VAT.
Source:Mysteel Global
