Posted on 19 Feb 2021
Weekly hot-rolled coil (HRC) production among China’s 37 flat steelmakers over February 4-17 gained 2.2% or 74,800 tonnes from that over January 28-February 3, as Chinese steel mills were still maintaining rather normal operations during the Chinese New Year holiday over February 11-17 on higher comparatively higher margins among major steel products as well as the anticipation of higher demand and prices soon after the holiday, Mysteel Global noted.
Over the latest survey period, the 37 flat steelmakers produced 3.4 million tonnes of HRC, and their average hot rolling capacity utilization rate also gained 1.92 percentage points from end of January and early February to 87.24%.
“Production during this CNY was higher than the previous years and most of the producers have not arranged any maintenance lately on fatter profits than other steel products,” a Shanghai-based analyst commented.
“Overall (HRC) stocks in East China have been piling up, as the demand came to a standstill before the CNY while deliveries had been continuing, but end-users may resume procurement soon, probably this Friday, the eighth day of a lunar month or an auspicious day to restart the business for many enterprises,” a second Shanghai-based trader added.
By February 17, HRC stocks at the traders in China’s 33 cities nationwide amounted to 2.6 million tonnes, or up 396,800 tonnes from February 4, and HRC stocks at the 37 mills also increased 222,000 tonnes from February 3 to 1.4 million tonnes, according to Mysteel’s surveys.
“For 2021, China’s manufacturers will probably resume operations earlier than usual, and starting next week, spot steel trading will very likely show signs of revival,” the first analyst said, and “the optimism will help to spur prices up, maybe by Yuan 50-100/tonne ($7.8-15.5/t) by the end of this week,” he anticipated.
China’s national price of the Q235 4.75mm HRC was assessed at Yuan 4,516/t as of February 10, the last working day before Chinese New Year holiday, or up Yuan 29/t on week even though steel trading had already stalled by then, Mysteel’s data showed.
Source:Mysteel Global
