Posted on 20 Apr 2022
China's domestic price of Q235 4.75mm hot-rolled coil (HRC), as assessed by Mysteel, slipped by Yuan 30/tonne ($4.7/t) on week to Yuan 5,285/t including the 13% VAT as of April 15. Demand from end-users was sluggish, mainly being affected by the disruptions caused by China's ongoing COVID-19 emergency, market sources shared.
The stocks at the traders in cities severely impacted by the pandemic continued to mount during the survey period, mainly due to the stagnant logistics, while those in the regions still relatively unscathed declined at a slower pace. Both showed that spot sales were dull last week, a Shanghai-based source said.
However, the room for HRC prices to decline further is limited, as most mills are showing a tendency to firm their offering prices, given the low profit margins they were likely to earn, he added.
Last week, most deals were concluded by traders rather than end-users, indicating that downstream demand was lackluster. The stocks at the traders are seen growing or declining at a slow pace in the near term, chiefly because of dull demand from end-users and more deliveries from mills in North China, another Shanghai-based source suggested.
Meanwhile, the stocks at the commercial warehouses in the 33 Chinese cities Mysteel tracks grew by 31,400 tonnes or 1.5% on week to 2.4 million tonnes as of April 14. Total hot coil stocks held by the 37 steelmakers Mysteel monitors surged by 4.9% or 46,100 tonnes on week to 992,700 tonnes as of April 13.
HRC output among those 37 mills was assessed at 3.2 million tonnes over April 7-13, increasing for the second week and by another 18,400 tonnes, Mysteel's data showed. Rolling capacity utilization at these mills also edged up by 0.47 percentage point to 82.08% on average during the same period.
Source:Mysteel Global
