Posted on 21 Nov 2023
China's national price of Q235 4.75mm hot-rolled coil (HRC) was assessed by Mysteel at Yuan 4,023/tonne ($560.5/t) including the 13% VAT as of November 17, up by another Yuan 49/t on week and hitting a new high since early August.
Similarly, on the Shanghai Futures Exchange during the survey week, the most-traded HRC contract for January delivery also rose by another 0.91% from the November 10 settlement price to close the daytime trading session at Yuan 4,012/t on November 17.
During last week, the improved market sentiment and relatively high raw materials costs combined to lift HRC prices in China's physical and futures markets, with many Chinese steelmakers enjoying healthier profit margins as a result. Inevitably, this led some mills to resume or crank up their HRC production, market insiders noted.
During November 13-17, HRC output among the 37 Chinese flat steel producers Mysteel regularly monitors rose by 50,600 tonnes or 1.7% on week to 3.08 million tonnes. Meanwhile, the hot-rolling capacity utilization rate among the 37 mills also moved higher by 1.29 percentage points on week to average 78.8% during the period, according to Mysteel's weekly survey.
However, buying of hot coils among end users such as re-rollers or fabricators didn't show any significant rise, and their appetite for high-priced flat steel remained slack during the survey period, the market sources pointed out.
As of November 16, HRC inventories held by the 37 surveyed mills had increased by 3% on week to reach 871,700 tonnes, Mysteel's survey showed. On the other hand, HRC stocks at commercial warehouses in the 33 cities under Mysteel's tracking posted a 2.2% on-week decline to sit at 2.65 million tonnes on the same day.