Posted on 24 Dec 2024
Production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors totalled 3.13 million tonnes over December 12-18, falling by 74,000 tonnes or 2.31% on week, the results of Mysteel's weekly latest production survey show.
The hot-rolling capacity utilization rate among the 37 mills also retreated by 1.89 percentage points to average 79.89% during the same period, the survey results indicated.
Some steel mills in East and North China halted hot strip mills to conduct maintenance during the survey week, leading to the on-week decrease in output, survey respondents observed.
However, the decline in production did not translate to a reduction in HRC inventories, as weak market sentiment amid the overall price retreat saw hot coil demand stay tepid and speculative buying for the flat product diminish, market watchers noted.
Additionally, HRC demand across China varied by region last week due to weather, with consumption in northern regions continuing to weaken as the winter cold intensified there, while East and South China displayed some resilience, they added.
By December 19, HRC inventories held by the 37 surveyed mills had stayed largely flat on week at 796,300 tonnes, down by just 0.14% from one week before. Similarly, HRC stocks at the commercial warehouses Mysteel monitors in 33 Chinese cities nationwide rose by just a small 0.28% on week to 2.3 million tonnes as of the same day.
As for prices, China's domestic HRC prices softened in both the spot and derivatives markets last week. By December 20, the price of Q235 4.75mm HRC under Mysteel's assessment had decreased by 1.38% on week to Yuan 3,511/tonne ($481.05/t) including the VAT.
The same day, the Shanghai Futures Exchange's most-traded HRC futures contract for May delivery had also slid by 2.32% on week to close the daytime trading session at Yuan 3,410/t.
Source:Mysteel Global
