China's HRC output gains 0.2% w-o-w

Total production of hot-rolled coils (HRCs) among the 37 Chinese flat steelmakers under Mysteel's regular tracking increased for the second week over July 20-26, up by 6,100 tonnes or 0.2% on week to settle at 3.1 million tonnes.
During the same survey period, the hot-rolling capacity utilization of these monitored mills edged up by 0.15 percentage point on week to 78.58%, Mysteel's data showed.

China's national price of Q235 4.75mm HRC reached a three-month high of Yuan 4,074/tonne ($568/t) including the 13% VAT as of July 27, up by Yuan 153/t on week, according to Mysteel's assessment.

Many traders gained confidence and lifted their offering prices during the survey period after noting the strengthening HRC futures prices on the Shanghai Future Exchange (SHFE), a Shanghai-based analyst said.

The SHFE's most-traded HRC contract for October delivery increased by Yuan 193/t from the settlement price on July 20 to close at Yuan 4,080/t when ending the daytime trading session on July 27.

The anticipation of China's central government to launch more economic stimulus measures gave a boot to steel market sentiment. Therefore, trading activities in the spot sales market were more active during the survey period compared with the previous week, with more speculative deals having been concluded, the analyst added.

Meanwhile, HRC inventories held by the 37 surveyed mills Mysteel tracks declined for the second week by another 83,800 tonnes or 9.1% on week to 839,300 tonnes as of July 26, as some mills accelerated their deliveries of hot coils to market during the survey period.

HRC stocks at trading houses across the 33 cities under Mysteel's tracking gained by 12,900 tonnes or 0.5% on week to reach 2.8 million tonnes as of July 27.

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.