Hot-rolled coil (HRC) production among the 37 Chinese steelmakers surveyed by Mysteel nationwide fell for a second week to reach 3.14 million tonnes over August 28-September 3, hitting a three-month low with a faster on-week decline of 3.2% or 105,000 tonnes. In the previous survey week, the production volume only dipped by 0.2% or 5,000 tonnes on week.
Survey respondents pointed out that three steel mills located in North and Northeast China commenced maintenance on their steelmaking facilities during the latest survey period, which contributed a large part to the HRC output reduction.
Both HRC rolling capacity utilization and operational rates among the 37 sampled mills dropped for the second straight week, with the former sliding by 2.7 percentage points on week to 80.3%, and the latter slipped by 3.1 percentage points on week to 76.6%, Mysteel's data found.
"(China's) HRC futures weakened last week, dampening spot market sentiment. Traders grew cautious, while limited supply and slower arrivals in some regions kept overall transactions subdued," commented a Shanghai-based source.
With lackluster demand from end-users, HRC stocks at both mills and traders built higher last week. Mysteel's survey on the 37 steel mills showed their HRC stocks grew for the second week, up by 0.4% or 3,000 tonnes on week to reach 1.71 million tonnes as of September 4.
Meanwhile, the tonnage at the commercial warehouses in the 33 Chinese cities Mysteel follows increased for the third straight week, up 3% or 85,800 tonnes on week to touch a 4.5-month high of 2.94 million tonnes by the same day.
Domestic HRC prices fluctuated in a rangebound last week amid low production and weak demand. As of September 9, the national price of Q235 4.75mm HRC was assessed by Mysteel at Yuan 3,435/tonne ($482/t) including the 13% VAT, edging up by Yuan 6/t on week.
Source:Mysteel Global
