Posted on 05 Dec 2023
Production of hot-rolled coil (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors increased for a third successive week during November 27-December 1 to reach 3.26 million tonnes, rising by another 65,700 tonnes or 2.1% on week, according to Mysteel's weekly production survey.
Accordingly, the hot-rolling capacity utilization rate among the 37 mills had also climbed for a third week to average 83.41% during the period, higher by another 1.68 percentage points on week, the survey results showed.
Survey respondents said that during the sample week, the keenness for HRC production among most steel mills remained relatively high as their profits on flats had improved recently. Besides, many steelmakers in North and Northeast China also restarted hot strip mills last week after completing maintenance. Both factors resulted in the continuous growth in hot coil output, they said.
The rise in HRC production contributed to an increase in coil inventories held by the 37 surveyed mills, with the tonnage mounting by another 2.6% on week to reach 910,600 tonnes as of November 30, Mysteel's survey showed.
Regarding demand, end-users chose to buy hot coils just for their immediate needs, winter being an off-season for steel consumption in China, survey respondents noted, adding that most buyers were disinterested in high-priced flat products.
As of November 30, HRC stocks at commercial warehouses in the 33 cities under Mysteel's tracking declined by another 2.7% on week to sit at 2.5 million tonnes.
By December 1, the spot price of Q235 4.75mm hot-rolled coil under Mysteel's assessment was at Yuan 4,032/t ($565.1/t) including the VAT, dipping by Yuan 3/t from one week before. On the Shanghai Futures Exchange the same day, the most-traded HRC futures contract for January delivery had risen by 0.2% from the November 24 settlement price to close the daytime trading session at Yuan 4,025/t.
Source:Mysteel Global
