Posted on 30 Aug 2022
Chinese domestic prices for carbon steel hot-rolled coils increased last week, but trading activity in the retail market was sparse, market sources said.
As of August 26, the price of Q235 4.75mm HRC under Mysteel's assessment rose by Yuan 90/tonne ($13/t) on week to Yuan 4,097/t including the 13% VAT.
The most-traded October HRC contract on the Shanghai Futures Exchange (SHFE) gained Yuan 182/t or 0.3% from the settlement price of August 19, closing the daytime trading session on August 26 at Yuan 4,061/t.
With HRC prices on the SHFE strengthening last week, most traders lifted their offering prices accordingly. However, the rise in prices cooled the buying enthusiasm of end-users, a Shanghai-based analyst said.
Some mills in Northeast China resumed production last week, while others in Central and Southwest China halted production to conduct maintenance, resulting in the moderate growth in output, the analyst said.
Over August 18-24, production of hot coils among the 37 Chinese steelmakers under Mysteel's survey edged up by 1,100 tonnes on week to 2.9 million tonnes, while their rolling capacity usage rate also gained by 0.03 percentage point on week to 74.63% as of August 24.
By August 24, HRC inventories held by these surveyed mills had surged by 27,800 tonnes or 3.4% on week to 853,400 tonnes, as some mills slowed deliveries in response to fewer orders from end-users, he added.
HRC stocks at the trading houses Mysteel tracks across 33 cities dropped for the fifth week by another 102,200 tonnes or 3.8% as of August 25 to reach 2.56 million tonnes.
The analyst predicted that HRC prices would head south this week, as some mills would resume production after maintenance stoppages. Besides, end-users have been reluctant to stock up tonnage, which would lead to reduced trading volume.
Source:Mysteel Global
