Posted on 27 Sep 2022
Hot-rolled coil (HRC) prices in China's physical market went V-shaped over September 16-23, a market insider said, though the spot trading volume remained poor last week.
China's prices of Q235 4.75mm HRC under Mysteel's assessment declined by Yuan 41/tonne ($5.7/t) from September 16 to reach Yuan 3,988/t, before rebounding to Yuan 4,038/t as of September 23, both according to Mysteel's assessment and including the 13% VAT.
Some end-users were cautious about buying after noting the decline in prices at the start of last week. Some traders lifted their offering prices later in the week after noting the strengthening HRC futures prices on the Shanghai Futures Exchange.
However, those traders were conservative in raising their prices, as most end-users showed little interest in stocking up, even though the National Day holiday over October 1-7 is fast approaching, a Shanghai-based analyst said.
Some mills in Northeast China halted production to conduct maintenance work last week, leading to the decline in output, the analyst said.
Over September 15-21, production of hot coils among the 37 Chinese steelmakers under Mysteel's survey slipped by 6,400 tonnes or 0.2% on week to 3.1 million tonnes. Their rolling capacity usage rate also declined by 0.16 percentage point on week at 78.82% as of September 21.
HRC inventories held by these surveyed mills had dropped by 4,600 tonnes or 0.5% on week to settle at 831,800 tonnes by September 21. HRC stocks at the trading houses Mysteel tracks across 33 cities had dropped by 90,500 tonnes or 0.6% on week to 2.4 million tonnes as of September 22.
The analyst predicted that HRC prices are likely to be narrowly range-bound this week, as some end-users in urgent need of HRC will procure some tonnage to avoid the risks, given the scarcity of orders at hand.
Source:Mysteel Global
