China's HRC output declines 1.2% on week

Total production of hot-rolled coils among the 37 Chinese flat steelmakers under Mysteel's regular tracking declined over June 15-21, slipping for the second week by another 36,500 tonnes or 1.2% on week to total 3.1 million tonnes.

Some steel mills in East China halted production to conduct maintenance work on their steelmaking or rolling facilities, leading to the further fall in the overall hot coil output, according to the survey.

During the same survey period, the hot-rolling capacity utilization rate of these monitored mills also dropped by 0.93 percentage point on week to settle at 78.87%, Mysteel's tracking data showed.

Meanwhile, China's national price of Q235 4.75mm HRC declined by Yuan 72/tonne ($10/t) on week to Yuan 3,857/t including the 13% VAT as of June 26, according to Mysteel's assessment.

Many traders lost confidence and trimmed their offering prices after noting the weakening in HRC futures prices on the Shanghai Futures Exchange (SHFE), a Shanghai-based analyst said.

The SHFE's most-traded HRC contract for October delivery lost by Yuan 117/t from the settlement price on June 19 to close at Yuan 3,755/t when ending the daytime trading session on June 26.

Most end-users procured hot coils only to meet their immediate production demand, while many traders opted to stay on the sidelines amid the falling prices, he added.

HRC stocks at trading houses across the 33 cities under Mysteel's tracking increased for the second week by another 2,200 tonnes or 0.1% to reach 2.6 million tonnes as of June 21.

In contrast, HRC inventories held by the 37 surveyed mills Mysteel tracks had declined to 888,300 tonnes as of June 21, down by 33,900 tonnes or 3.8% from one week earlier.

Written by Villanelle Xia, xiayi@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.