Over March 24-30, total production of hot-rolled coil (HRC) among the 37 Chinese flat steelmakers under Mysteel’s tracking reversed down after two weeks of increases, mainly due to maintenance stoppages among steelmakers, according to Mysteel’s survey.
During the latest survey period, China’s HRC output slipped by 68,600 tonnes or 2.2% on week to 3.1 million tonnes, while the rolling capacity utilization rate at these surveyed mills also eased by 1.75 percentage on week to 78.51%.
Some steelmakers in North, Northeast and Southwest China conducted maintenance last week, chiefly because of low profit margins and sluggish demand from end-users, a Shanghai-based source said.
The decline in output, plus the high costs of production, prompted the rise in HRC prices, he added. China’s domestic price of Q235 4.75mm HRC under Mysteel’s assessment gained by Yuan 44/tonne ($6.9/t) from March 28 to reach Yuan 5,328/t including the 13% VAT as of April 2.
In addition, Shagang, China’s largest privately-owned steelmaker headquartered in East China’s Jiangsu, lifted its domestic price of Q235 5.5mm HRC for April by Yuan 400/t on month to a total of Yuan 5,600/t including the 13% VAT, according to its latest pricing policy.
Domestic HRC prices are seen growing in the near term, as some traders are firming their offering prices on high booking costs, the source commented. Also, availability in some regions might be tight, given that some mills are choosing to export some HRC to enjoy the better margins available in international markets.
Hot coil inventories held by the 37 steelmakers under Mysteel’s tracking slipped by 17,000 tonnes or 1.8% on week to 934,800 as of March 30, while the stocks at the commercial warehouses in the 33 Chinese cities Mysteel tracks dropped by 45,700 tonnes or 1.8% on week to 2.4 million tonnes as of March 31.
Written by Villanelle Xia, xiayi@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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