Posted on 10 Jun 2025
Production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors increased again during the May 30-June 5 week to nearly a four-month high of 3.29 million tonnes, higher by 92,000 tonnes or 2.9% on week, the results of Mysteel's latest production survey show.
The hot-rolling capacity utilization rate among the sampled mills also moved up by 2.35 percentage points on week to average 83.99% during the latest survey period, the results indicated.
Some steel mills in North and East China had resumed hot strip mill operations after maintenance during the survey period, leading to the on-week climb in HRC production, survey respondents noted.
The relatively healthy profit margins that the makers could earn last week meant that supplies of coils rose, but hot coil consumption didn't follow suit, the data show. This is because most buyers held a cautious stance toward procurement due to the lull in steel consumption that frequently occurs in summer.
Accordingly, the mismatch between the dull demand and higher output saw the destocking that had occurred the previous week come to a stop, Mysteel Global notes.
By June 5, HRC inventories held by the 37 surveyed mills had risen by 1.8% on week to 763,500 tonnes, snapping a four-week decline. By the same day, hot coil stocks held by traders at commercial warehouses in the 33 Chinese cities Mysteel checks also reversed the slide of the previous three weeks to mount by 2.5% on week to 2.64 million tonnes.
Despite the weak demand, China's HRC prices were supported by the rally in feedstock prices, albeit slightly. For example, coking coal prices have increased recently amid market worries about possible disruptions to supplies from Mongolia, as reported.
As of June 6, China's national price of Q235 4.75mm HRC under Mysteel's assessment was largely flat on week at Yuan 3,250/tonne ($452/t) including the VAT, lower by just 0.2% on week.
On the Shanghai Futures Exchange, the most-traded HRC futures contract for October delivery gained 0.5% on week to close the daytime trading session on June 6 at Yuan 3,092/t.
Source:Mysteel Global
