China's HRC output gains 0.8% on week

Total production of hot-rolled coils (HRC) among the 37 Chinese flat steelmakers under Mysteel's regular tracking gained over June 22-28, up by 23,500 tonnes or 0.8% on week to settle at 3.1 million tonnes after two weeks of declines.

Some steel mills in Northeast China resumed operations at their hot-rolling facilities after maintenance stoppages, resulting in the rise in the total hot coil output, according to the survey.

During the same survey period, the hot-rolling capacity utilization of those monitored mills also increased by 0.6 percentage point on week to settle at 79.47%, Mysteel's data showed.

Meanwhile, China's HRC prices saw an upward trend as the market sentiment improved. The national price of Q235 4.75mm HRC edged up by Yuan 19/tonne ($2.6/t) from June 25 to Yuan 3,899/t including the 13% VAT as of June 29, according to Mysteel's assessment.

Many traders lifted the offering prices for their hot coil stocks, mainly encouraged by the rebound 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 rallied by Yuan 70/t from the settlement price on June 26 to close at Yuan 3,815/t when ending the daytime trading session on June 29.

However, higher HRC prices in the spot market dented buying enthusiasm from end-users, especially during the slack period for steel consumption, leading to a rise in HRC stocks at trading houses, he commented.

HRC stocks at trading houses across the 33 cities under Mysteel's tracking increased for the third week by another78,800 tonnes or 3% to reach 2.7 million tonnes as of June 29.

Also, HRC inventories held by the 37 surveyed mills Mysteel tracks had grown to 884,500 tonnes as of June 28, up by 30,100 tonnes or 3.5% 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.