- Trade frictions, slow demand recovery pressure mills
- Raw materials prices decline, fail to offer cost support
Mysteel: Production of hot-rolled coils (HRCs) among the 37 Chinese flat steel producers Mysteel regularly monitors decreased for a third consecutive week over 27 February-5 March to 3.12 million tonnes (mnt), by 115,800 tonnes (t) or 3.6% w-o-w, the results of Mysteel’s latest production survey show.
Some steel mills in North and East China halted hot strip mills to conduct maintenance or slowed their pace of production during the week, resulting in the w-o-w decrease in HRC output, survey respondents explained.
The hot-rolling capacity utilisation rate among the sampled mills also eased further by 2.96 percentage points to average 79.59% during the same period, the results indicated.
The slower-than-expected recovery in domestic demand, coupled with rising trade friction targeting Chinese steel products, including HRC, collectively prompted producers to slow their HRC production, market watchers noted.
During the survey week, continuous declines in steelmaking raw materials prices also eroded tags of finished steel products, including HRCs, from the cost side.
As of 7 March, China’s national price of Q235 4.75 mm HRCs under Mysteel’s assessment had slipped by another 0.5% w-o-w to RMB 3,428/t ($472/t), including VAT.
On the same day, the Shanghai Futures Exchange’s most-traded HRC futures contract for May delivery closed the daytime trading session at RMB 3,363/t, down by 1.8% w-o-w.
By 6 March, HRC inventories held by the 37 surveyed mills had dropped by 3.7% w-o-w to 880,300 t. Similarly, those held by traders at commercial warehouses in the 33 Chinese cities that Mysteel monitors nationwide had dipped by 0.9% w-o-w to 3.41 mnt by the same day.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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