The price of Q235 4.75mm hot-rolled coil (HRC) in China gained another Yuan 74/tonne ($10.6/t) on week to top Yuan 3,992/t including the 13% VAT as of August 7, a new high since May 28 2019, according to Mysteel’s assessment. Were it not for a rise in production the price might even have climbed moderately higher, Mysteel Global noted.
Hot coil production among 37 surveyed flat steelmakers nationwide moved up by 81,800 tonnes or 2.5% on week to reach 3.35 million tonnes over July 30-August 5. In parallel, the rolling capacity utilization rate among those mills also gained 2.09 percentage points on week to average 85.5% over the same period, Mysteel’s data showed.
Sentiment in the spot market improved significantly last week given the buoyant futures market, with the most-traded HRC contract on the Shanghai Futures Exchange gaining another Yuan 83/t from the settlement price on July 31 to end the daytime session on August 7 at Yuan 3,904/t.
“The space for prices to climb further is limited as overall demand is not that robust,” a Shanghai-based analyst said. “But traders are showing very little interest in making any concession on prices given that iron ore prices continue to fluctuate at a high level and inventories are not so high for now.”
The inventories of hot coil held by traders in the 32 cities Mysteel surveys increased 1.6% on week to 2.8 million tonnes as of August 6, or some 7.5% higher on year, Mysteel’s survey showed. The stocks have thinned considerably from the year’s peak of 4.1 million tonnes in mid-March.
HRC stocks held by the 37 sampled mills also inched up due to the rise in production, gaining 2,400 tonnes on week to reach 1.12 million tonnes as of August 5, or up by 16.5% on year, according to the survey. The volume was also much lower than the historical high of 1.9 million tonnes in late February.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Photo: World Steel
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