Posted on 13 Jan 2025
Production of hot-rolled coils (HRC) by the 37 Chinese flat steel producers that Mysteel regularly monitors reached 3.04 million tonnes over January 2-8, nudging up by 11,500 tonnes or 0.38% on week, the results of Mysteel's latest production survey show.
The hot-rolling capacity utilization rate among the 37 mills also increased by a tiny 0.3 percentage points to average 77.64% during the same period, the survey results indicated.
Last week some steel mills in East and North China resumed hot coil production after maintenance, leading to the on-week gain in HRC output, respondents observed.
Overall, HRC consumption stayed dull during the sample week. With Chinese New Year holiday starting in just two weeks, the replenishment needs of buyers weakened while steel traders continued to show little interest in winter stocking of the coils.
As of January 9, hot coil stocks held at the commercial warehouses Mysteel monitors in the 33 Chinese cities nationwide had climbed 3.33% on week to 2.33 million tonnes, ending the prior two weeks' destocking.
On the same day, HRC inventories held by the 37 surveyed mills had eased by 5.73% on week to sit at 771,500 tonnes.
In response to the soured market sentiment, some steel mills responded to the pressure by reducing their HRC offers, hoping to win more orders. This in turn, served to depress market prices further.
Indeed, domestic HRC prices in both the spot and derivatives markets deceased throughout most of last week. By January 10, the price of Q235 4.75mm HRC under Mysteel's assessment had eased by 2.59% on week to Yuan 3,388/tonne ($462.1/t) including the VAT.
The same day, the Shanghai Futures Exchange's most-traded HRC futures contract for May delivery had also dropped by 1.92% on week to close the daytime trading session at Yuan 3,312/t.
Source:Mysteel Global
