Posted on 24 Sep 2024
Production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors edged down to 3.01 million tonnes during the week of September 16-20, falling by another 8,900 tonnes or 0.29% on week, the results of the latest weekly production survey show.
The hot-rolling capacity utilization rate among the 37 mills also slipped by 0.23 percentage points on week to average 76.97% during the survey week, the results showed.
Behind the on-week reduction in HRC output was the fact that some steel producers in North China stopped their hot strip mills during the survey week to conduct maintenance, survey respondents noted.
Overall, HRC users maintained purchases for immediate consumption during the survey week, but there was also some speculative buying when prices of HRC derivatives showed signs of increasing, they said.
Lower output and sustained buying together saw hot coil stockpiles decrease on week. As of September 19, HRC inventories at the commercial warehouses Mysteel monitors in 33 Chinese cities nationwide declined by another 1.98% on week to sit at 3.33 million tonnes. The same day, HRC stocks held by the 37 sampled mills had also declined by 3% on week to 888,000 tonnes.
In fact, market participants generally expect HRC purchases to rise this week as end-users are likely to replenish their flat product inventories before China's weeklong National Day holiday that starts on October 1.
As of September 20, China's spot price of Q235 4.75mm HRC under Mysteel's assessment had nudged up by Yuan 5/tonne ($0.71/t) or 0.16% on week to reach Yuan 3,189/t including the VAT.
On the same day, however, the Shanghai Futures Exchange's most-traded HRC futures contract for January delivery closed the daytime trading session at Yuan 3,228/t, down by Yuan 17/t or 0.52% on week.
Source:Mysteel Global
