Posted on 25 Jun 2024
After briefly reaching a 2-year high of 3.28 million tonnes during the week of June 10-14, hot-rolled coil (HRC) output among the 37 Chinese flat steel producers Mysteel regularly monitors fell to 3.21 million tonnes during June 17-21, down by 69,300 tonnes or 2.12% on week, the results of Mysteel's latest production survey show.
The hot-rolling capacity utilization rate among the 37 mills also moved lower by 1.77 percentage points on week to average 81.94% last week, the survey found.
Behind the on-week decline in HRC output was the fact that some steel producers in North China had cut their crude steel output during the survey period, with hot coil production falling in tandem, survey respondents noted. Meanwhile, with the end of the month approaching, many steel mills sped up their hot coil deliveries last week, they added.
Lower output and faster shipments together saw HRC stocks held by the 37 surveyed mills ease further by 0.45% on week to total 888,400 tonnes as of June 20, according to Mysteel's tracking.
On the other hand, HRC inventories at commercial warehouses in the 33 Chinese cities regularly monitored by Mysteel gained by 0.67% on week to reach 3.27 million tonnes by June 20, reflecting weak downstream HRC demand so far this month. June is usually being a slow steel consumption month in China with high temperatures and constant rain affecting much of the country, Mysteel Global notes.
Sentiment among market participants was weak last week, with some HRC traders clipping their quotations to encourage sales, while end-users just focused on buying for their immediate needs, market watchers noted.
By June 21, China's spot price of Q235 4.75mm HRC under Mysteel's assessment had decreased again by Yuan 27/tonne ($3.7/t) or 0.71% on week to Yuan 3,764/t including the VAT.
Similarly, the Shanghai Futures Exchange's most-traded HRC futures contract for October also closed the daytime trading session lower at Yuan 3,753/t on June 21, losing another Yuan 51/t or 1.34% from the June 14 settlement price.
Source:Mysteel Global
