Posted on 30 Jul 2024
After the brief decline the week before, production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors rebounded to 3.28 million tonnes during the week of July 22-26, higher by 11,900 tonnes or 0.36% on week, the results of the latest weekly production survey show.
The hot-rolling capacity utilization rate among the 37 mills also inched up by 0.3 percentage point on week to average 83.85% last week, the survey results showed.
Some steel mills North China had resumed hot coil production during the survey week after completing maintenance stoppages, resulting in the on-week rise in HRC output, survey respondents noted.
However, the demand for coils among end-users was too weak to fully match the high rates of HRC output currently, market sources commented, warning that if steel mills don't take the initiative to cut HRC output soon and instead, maintain their present levels of production, coil stocks would continue to mount and drag on prices.
Besides, no new news emerged last week that suggested steel demand might improve, leaving no supportive macro-economic factors to lift the market sentiment, they added.
As of July 25, HRC stocks held by the 37 surveyed mills that Mysteel follows climbed by 3.59% on week to reach 958,100 tonnes. By the same day, inventories of the flat product at the commercial warehouses Mysteel monitors in 33 Chinese cities nationwide had also moved higher by 1.11% on week to 3.34 million tonnes.
Regarding prices, a slight pick-up in HRC prices on the last working day of last week failed to offset the previous four days' losses in both the futures and spot markets, Mysteel observed.
By July 26, China's spot price of Q235 4.75mm HRC under Mysteel's assessment had dropped by Yuan 108/tonne ($14.89/t) or 2.95% on week to sit at Yuan 3,555/t including the VAT.
Similarly, the Shanghai Futures Exchange's most-traded HRC futures contract for October delivery also closed the daytime trading session lower at Yuan 3,557/t on July 26, down by Yuan 108/t or 2.9% on week.
Source:Mysteel Global
