Hot-rolled coil (HRC) inventories with the traders in the 33 Chinese cities reversed down over March 13-19 after nearly three consecutive months of growth since late December 2019 to about 4 million tonnes as of March 19, more as Chinese steel mills had been trimming output amid the dismal market situation, Mysteel’s latest weekly survey showed.
The HRC stocks at the traders reversed down by 2% or 81,000 tonnes on week, and the volume at the 37 Chinese mills also decreased for the fourth successive week by another 3.2% on week to 1.57 million tonnes as of March 18, as the steel producers had consciously trimmed their HRC output for the eighth successive week over March 12-18, cutting another 1.5% on week to about 3 million tonnes, hitting a fifteen-month low since mid-December 2018, according to Mysteel’s latestsurveys.
These mills’ HRC rolling capacity utilization rate, thus, also dropped to its fifteen-month low of 77.3%, or down further by 1.2 percentage points on week, Mysteel’s data showed.
In general, China’s domestic demand for HRC appeared weaker than long steel especially when end-users such as auto, home appliance and machinery manufacturers have all been suffering from the impact of the COVID-19 by various degrees for the first quarter of 2020.
“HRC demand in North China, in comparison, has been better than the other regions in the country, as local steelmakers have received more orders recently amid the resumption of more construction projects,” a Shanghai-based analyst said.
As of March 20, China’s national average price for Q235 4.75mm HRC recovered moderately by Yuan 13/tonne ($1.8/t) on week to Yuan 3,521/t, which was a far cry from the Yuan 67/t week-on-week gain in China’s national average HRB400 20mm dia rebar benchmark price to Yuan 3,672/t over the period, both including the VAT, Mysteel’s data showed.
HRC inventories both at the Chinese traders and mills may decline further in the next few weeks amid the prevailing market caution on the worsening spread of the COVID-19 globally, and the downstream users of flat steel such as automakers may be more seriously affected in and out of China.
This article as been published under and article exchange agreement between Mysteel Global and SteelMint
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