Posted on 10 Jan 2023
Total production of hot-rolled coils (HRC) among the 37 Chinese flat steelmakers under Mysteel's tracking slipped by 2.6% or 79,200 tonnes on week to 3 million tonnes during December 29-January 4.
During the same survey period, the monitored mills' hot-rolling capacity utilization rate also declined by 2.02 percentage points on week to 76.93%, Mysteel's data showed.
Some mills in North, Central and East China halted production and conducted maintenance work last week, which led to the decline in output, a Shanghai-based analyst said.
China's domestic HRC prices remained largely stable last week, with the domestic price of Q235 4.75mm HRC under Mysteel's assessment gaining Yuan 7/tonne ($1/t) on week to reach Yuan 4,170/t including the 13% VAT as of January 6.
Many mills lifted their offering prices to help offset high production costs, the analyst said. For example, the Mysteel SEADEX 62% Australian Fines index also increased to $119.6/dmt CFR Qingdao as of January 6, up by $2.3/dmt on week.
However, the dull demand for coil from both end-users and traders prevented the prices from climbing further. Many end-users procured only to fulfill immediate demand with the Chinese New Year holiday from January 21 drawing near, he added, while most traders were unwilling to make winter replenishment, as the mills' winter restocking prices were above market expectations.
HRC inventories held by the surveyed 37 mills grew by 12,700 tonnes or 1.6% on week to 823,900 tonnes as of January 4, while HRC stocks at trading houses across the 33 Chinese cities under Mysteel's tracking also gained by 94,800 tonnes or 4.7% on week to 2.1 million tonnes as of January 5.
Source:Mysteel Global
