Posted on 03 Sep 2024
Production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors declined to 3.05 million tonnes during the week of August 26-30, down by 52,200 tonnes or 1.68% on week, the results of the latest weekly production survey show.
The hot-rolling capacity utilization rate among the 37 mills also declined by 1.34 percentage points on week to average 77.93% last week, the survey found.
Compared with rebar, the HRC market's thinner profitability had encouraged many steel mills to rechannel their hot metal to the production of construction steel items last week instead of focussing on flat products. Some steel producers in East China had also stopped their hot strip mills last week to conduct maintenance, survey respondents noted.
Regarding transactions, the continuous drop in HRC prices resulted in some speculative buying last week, which in turn gave a lift to hot coil prices during the survey week, market sources noted.
As of August 29, inventories of hot coils at the commercial warehouses Mysteel monitors in 33 Chinese cities nationwide had eased by 1.13% on week to land at 3.46 million tonnes. However, the HRC stocks held by the 37 surveyed mills Mysteel tracks had risen by 3.87% on week to reach 957,500 tonnes by the same day.
By August 30, China's spot price of Q235 4.75mm HRC under Mysteel's assessment had increased by Yuan 60/tonne ($8.45/t) or 1.88% on week to Yuan 3,247/t including the VAT.
By the same day, the Shanghai Futures Exchange's most-traded HRC futures contract for January delivery closed the daytime trading session at Yuan 3,339/t, higher by Yuan 86/t or 2.64% on week.
Source:Mysteel Global
