After falling for three consecutive weeks, production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors recovered to 3.2 million tonnes during the week of July 24-30, higher by 53,000 tonnes or 1.67% on week, the results of the latest weekly production survey show.
The hot-rolling capacity utilization rate among the 37 mills also rebounded by 1.36 percentage points on week to average 82.47% last week, while their average operational rate also ticked up by 1.56 percentage points to sit at 81.25%, the survey findings indicated.
Some steel mills in North China had resumed hot coil production during the survey week after ending overhaul stoppages, resulting in the on-week rise in HRC output, a survey respondent noted.
Higher hot coil output and still thin demand together saw HRC stocks held by the 37 surveyed mills edge up by 13,000 tonnes or 1.67% on week to reach 793,000 tonnes as of August 1.
In parallel, inventories of the flat product at the commercial warehouses Mysteel monitors in 33 Chinese cities nationwide had also inched up by 0.56% or 14,900 tonnes on week to 2.7 million tonnes by the same day, the numbers show. The recent HRC spot price rally dampened the appetite of end-users to purchase during the survey week, even though the HRC market had cooled down a little, Mysteel Global notes.
By August 1, China's spot price of Q235 4.75mm HRC under Mysteel's assessment had fallen by Yuan 42/tonne ($5.85/t) or 1.2% on week to Yuan 3,476/t including the VAT. Nevertheless, hot coil users such as fabricators and coated coil producers still regarded the price as high in the prevailing market circumstances amid the usual summer slowdown.
The same day, the Shanghai Futures Exchange's most-traded HRC futures contract for October delivery closed the daytime trading session at Yuan 3,401/t, down by Yuan 106/t or a large 3% on week, the exchange data showed.
HRC prices are likely to be rangebound in the coming few weeks, Mysteel Global noted.
Source:Mysteel Global