Over April 28-May 4, total production of hot-rolled coil (HRC) among 37 Chinese flat steelmakers under Mysteel’s tracking reached a nine-month high of 3.2 million tonnes after growing for the fifth consecutive week, as some mills in North China resumed normal production last week, market sources shared.
During the latest survey period, the rolling capacity utilization rate at these surveyed mills grew accordingly by 0.02 percentage point on week to 82.78%.
Actual demand for HRC hasn’t improved after China’s Labour Day holiday over April 30-May 4, and most traders hold a bearish sentiment about the prices in the near term, a Shanghai-based source shared.
Chinese price of Q235 4.75mm HRC under Mysteel’s assessment increased by Yuan 57/tonne ($8.5/t) from April 29 to Yuan 5,217/t including the 13% VAT as of May 5, before retreating to Yuan 5,170/t including the VAT on May 6.
The HRC prices are forecasted to decline this week, as stocks at traders are likely to mount with steady supply from steel mills against sluggish demand from end-users. Moreover, some traders were willing to offload some tonnage at lower prices to maintain sufficient cash flows at hand.
However, the room for HRC prices to decline further may be limited, as some steelmakers have been producing at losses, the source commented.
Meanwhile, stocks at commercial warehouses in 33 Chinese cities under Mysteel’s tracking surged by 2.6% or 62,500 tonnes on week to 2.4 million tonnes as of May 5. As of May 4, hot coil stocks held by 37 steelmakers Mysteel monitors increased by 1.6% or 16,500 tonnes on week to a new high of 1.06 million tonnes since July 9 2021.
Written by Villanelle Xia, xiayi@mysteel.com
Note: This article has been published in accordance with an article exchange agreement between MySteel Global and SteelMint.
Leave a Reply