- Inventories at warehouses rise for 6th straight week
- Mills reluctant to cut output amid sustained profitability
Mysteel: Cold-rolled coil (CRC) prices in China are likely to stay under pressure this month, according to the findings of Mysteel’s latest survey. The high run-rates being maintained by mills — at a time when demand from end-users remains lacklustre — will ensure inventories remain high, market sources warn.
On 10 September, Mysteel assessed national prices of 1-mm CRC at RMB 3,951/tonne (t) ($555/t), including 13% VAT, slipping by RMB 21/t from the end of August.
Market participants are pessimistic about China’s CRC prices after noting the high stock levels at traders’ warehouses. Mysteel’s weekly survey showed that CRC inventories at warehouses in the 29 Chinese cities under its regular tracking had climbed for the sixth consecutive week to 2.37 million tonnes (mnt) as of 4 September, up by 2% w-o-w and recording the highest since late June 2024.
CRC inventories held by Chinese traders are expected to hover high in the near term as deliveries from mills swell. Many domestic steelmakers are unwilling to trim their production of CRC on their own initiative, as they can still generate some profit from their sales of cold coils.
Meanwhile, expectations for a recovery in demand from end-users this month — usually a peak season for consumption in China — may also encourage steelmakers to keep their operation ratios high to monitor market changes, Mysteel Global noted.
During 28 August-3 September, CRC output among the 29 steel producers nationwide tracked by Mysteel totalled 858,400 t, still a high level despite the w-o-w dip of 0.5%.
However, the recovery in CRC demand may fail to meet market expectations, given the weakness in some end-user industries such as home appliance manufacturing.
This month, China’s scheduled production of the three most popular home appliances — comprising air conditioners, refrigerators, and washing machines—may reach 27.07 million units, which would be 7.2% lower compared with actual production in September last year.
Additionally, amid ongoing tariff tussles globally and geopolitical conflicts, manufacturers continue to face significant headwinds in their export orders. As a result, many domestic traders and end-users are opting to purchase CRCs only to fulfil their immediate needs rather than building up stocks.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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