Posted on 11 Oct 2022
Hot-rolled coil (HRC) prices in China's physical market gained over September 30-October 9, mainly underpinned by strengthening billet prices, a market insider said.
Domestic prices of Q235 4.75mm HRC under Mysteel's assessment increased by Yuan 27/tonne ($3.8/t) from September 30 to reach Yuan 4,074/t including the 13% VAT as of October 9.
Hot coil prices were able to source some support from billet prices, a Shanghai-based analyst said. The Q235 150mm square billet price in North China's Tangshan under Mysteel's assessment had edged up by Yuan 30/t from September 30 to Yuan 3,710/t EXW and including the 13% VAT as of October 9.
Over September 29-October 5, production of hot coils among the 37 Chinese steelmakers under Mysteel's survey had risen by 62,200 tonnes or 2.1% on week to 3.1 million tonnes. The mills' rolling capacity usage rate also picked up by 1.59 percentage points on week to 78.17% as of October 5.
After noting the rise in HRC prices, many end-users were cautious about buying during and after the National Day holiday over October 1-7, as most had replenished stocks ahead of the break. Besides, many coils had been delivered to commercial warehouses during and after the holiday, resulting in a surge in HRC stocks at the warehouses, the analyst added.
HRC inventories held by these surveyed mills had jumped by 38,500 tonnes or 4.8% on week to settle at 841,100 tonnes by October 5. HRC stocks at the trading houses Mysteel tracks across 33 cities had also surged by 181,300 tonnes or 7.8% on week to 2.5 million tonnes as of October 6.
HRC prices are likely to lose some ground this week, he predicted, as many end-users have shown little interest in buying amid the rise in supply from mills. Besides, the accumulation of stocks at the warehouses will also weigh on prices.
Source:Mysteel Global
