Posted on 21 Jan 2025
The volume of hot-rolled coils (HRC) produced by the 37 Chinese steel mills that Mysteel regularly monitors totalled 3.2 million tonnes over January 9-15, higher by a larger 163,000 tonnes or 5.36% on week, the results of Mysteel's latest production survey show.
The hot-rolling capacity utilization rate among the 37 mills also climbed by a 4.16 percentage points to average 81.8% during the same period, the survey results indicated.
Behind the on-week rise in hot coil output was the fact that some steel mills in East and North China had lifted throughput on their hot strip mills during the survey week after completing maintenance, survey respondents noted.
In addition, the recent rally in HRC prices also spurred the mills to lift their output of the flat product, they added.
Indeed, hot coil derivatives had witnessed six consecutive trading days of growth by January 17, with the Shanghai Futures Exchange's most-traded May HRC contract rising by 5.19% on week to close Friday's daytime trading session at Yuan 3,484/tonne ($476.1/t).
Along with the upbeat futures market, by January 17 China's spot price of Q235 4.75mm HRC under Mysteel's assessment had also strengthened for five straight days to reach Yuan 3,480/t including the VAT, higher by 2.72% from one week before.
However, this uptrend was mainly driven by sentiment rather than actual demand, market watchers commented, explaining that as the Chinese New Year holiday approaches, more and more steel traders and end-users are leaving the market, with only those end-users with a pressing need for coils are keeping transactions active.
As of January 16, hot coil stocks held at the commercial warehouses Mysteel monitors in 33 Chinese cities nationwide had increased by 2.08% on week to 2.38 million tonnes.
On the same day, HRC inventories held by the 37 surveyed mills had also moved up by 2.2% on week to 788,500 tonnes.
Source:Mysteel Global
