Posted on 07 Feb 2023
China's hot-rolled coil (HRC) prices under Mysteel's assessment declined over January 28-February 3, and trading activities in the spot market cooled, a market insider said.
As of February 3, the spot price of Q235 4.75mm HRC had dropped by Yuan 51/tonne ($7.5/t) from January 28 to Yuan 4,209/t including the 13% VAT, the assessment showed. January 28 was the substitute working day for the Chinese New Year (CNY) holiday over January 21-27.
Most traders lost confidence and trimmed their offering prices after noting the decline in HRC futures prices on the Shanghai Futures Exchange (SHFE), a Shanghai-based analyst said.
The most-traded HRC contract on the SHFE for May delivery closed the daytime trading session at Yuan 4,084/t on February 3, down by Yuan 178/t from the settlement price of January 30, according to the exchange's data.
Many end-users were cautious about buying coil last week and procured only to meet immediate demand, as most were worried about the prices declining further, the analyst added. Besides, some end-users did not resume normal operations till February 6, as February 5 was China's Lantern Festival, traditionally marking the last day of CNY celebrations.
HRC stocks at trading houses across the 33 Chinese cities under Mysteel's tracking reached a 22.5-month high of 3.1 million tonnes as of February 2, surging by 408,100 tonnes or 15.1% on week. HRC inventories held by 37 surveyed mills had declined by 40,600 tonnes or 4.2% on week to 926,900 tonnes as of February 1.
Over January 26-February 1, production of hot coils among the 37 steelmakers stood at 3.1 million tonnes, up by 4,500 tonnes or 0.1% on week. During the same survey period, the surveyed mills' hot-rolling capacity utilization also increased by 0.12 percentage point on week to 78.19%, Mysteel's data showed.
Source:Mysteel Global
