China’s spot hot-rolled coil (HRC) prices had stayed resilient over November 30-December 4, having refreshed its 25-month high since October 29 2018, as the demand from the end-users had been sound, though traders’ enthusiasm of stocking up waned on soaring prices, Mysteel Global noted.
The Q235 4.75mm HRC price grew for the seventh straight week last week, up another Yuan 76/tonne ($11.6/) on week to Yuan 4,216/t as of December 4, which was in contrast with the spot HRB400 20mm dia rebar price in China, which fell for the second week, down another Yuan 69/t on week to Yuan 4,044/t by last Friday, both including the 13% VAT, according to Mysteel’s assessments.
“The cold winter has affected the demand for construction steel, but I can’t feel any change in flat steel demand, which has been quite sustainable,” an official from a steelmaker in North China’s Hebei province said, “though the traders seem to be more cautious in booking new orders on noting the continuing growths in HRC prices,” he added.
At the same time, lower production from the Chinese steel mills had been lending support to the domestic HRC price, as the output from 37 steel mills under Mysteel’s tracking dropped for the second week to 3.3 million tonnes over November 26-December 2, or down 36,700 tonnes or 1.1% on week, and their hot-rolling capacity utilization rate, accordingly, went down 0.94 percentage point on week to an average of 83.98% over the week.
Stable demand and less output saw HRC stocks at both the Chinese traders and steel mills decline, and the tonnage at the commercial warehouses in 33 Chinese cities ebbed for the eighth week and at a faster pace of 155,700 tonnes against the 111,300 tonnes in the prior week to 2.2 million tonnes as of December 4, according to Mysteel’s tracking.
“Traders feel very little pressure from stocks now, so they will not make concessions on prices, but at the same time, most of them will not be active buyers either, as they are trying to manage pricing risks especially with uncertainties in the coming months,” a Shanghai-based analyst said.
Over November 27-December 3, HRC stocks at 37 Chinese steel mills also fell for the second week, down another 91,400 tonnes on week, also higher than the decline of 15,200 tonnes in the prior week to 935,550 tonnes, according to Mysteel’s survey.
Written by Anna Wu, wub@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Photo: World Steel Association
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