The consumption of hot-rolled coil (HRC) in China is likely to hold steady in the near term, owing mostly to the recovery of domestic demand, while the country’s hot coil exports will remain dull recently.
China’s manufacturing industry has been gradually recovering with the subdued effect of pandemic and support of stimulus policies, while interest rate hikes in overseas markets have dampened the overall demand from manufacturing sectors of major advanced economies, Mysteel noted.
For example, China’s Purchasing Managers’ Index (PMI) for the manufacturing industry climbed by 2.5 index points on month to reach 52.6 in February, hitting the highest level since May 2012, according to the release by China’s National Bureau of Statistics (NBS).
Last month, both supply and demand in the domestic manufacturing industry expanded. The sub-index of production and new orders moved up by 6.9 points and 3.2 points on month to 56.7 and 54.1 respectively, the NBS data showed.
Many local governments in China have also launched a series of policies to promote cluster development of the manufacturing industry, which can not only help the sector remain resilient to uncertainties caused by overseas markets, but also do good to the industrial upgrade.
As for overseas markets, China mainly exported HRCs to Southeast Asia, West Asia and East Asia in 2022, while many countries in Southeast Asia exported their hot coils to Europe and America, according to the statistics from the country’s General Administration of Customs (GACC).
Most HRCs have been exported to Europe and America eventually, but the demand for the material from manufacturing sectors of those regions will keep contracting in anticipation of rising interest rates. Therefore, China’s HRC exports are likely to be lackluster in the near term.
Written by Villanelle Xia, xiayi@mysteel.com
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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