WEEKLY: China's HRC output at 11.5-month low

ABSTRACT

During the same survey period, the surveyed mills' hot-rolling capacity utilization rate also slipped by 1.89 percentage points on week to 73.79%, Mysteel's data showed.

Some mills in East China halted production and conducted maintenance works last week, leading to the decline in HRC output among steelmakers, a Shanghai-based analyst said.

China's domestic HRC prices remained largely stable last week, with the domestic price of Q235 4.75mm HRC under Mytseel's assessment slipping by Yuan 1/tonne ($0.1/t) on week to Yuan 3,902/t including the 13% VAT as of November 25.

Despite the rise in spot HRC futures prices on the Shanghai Futures Exchange (SHFE), most traders kept their sales prices stable to facilitate sales, given dull demand from end-users amid the outbreak of COVID-19 cases across China, a Shanghai-based analyst said.

In the futures market, the most-traded January rebar contract on the SHFE closed the daytime trading session at Yuan 3,736/t as of November 25, higher by Yuan 21/t from the settlement price of November 18.

Only end-users in urgent need of HRC were willing to take some tonnage last week, reflecting a cautious stance prevailing in the market, another Shanghai-based analyst said.

HRC inventories held by the surveyed 37 mills fell by 27,700 tonnes or 3.2% on week to 838,500 tonnes as of November 23, while HRC stocks at trading houses across 33 Chinese cities under Mysteel's tracking dropped by 115,900 tonnes or 5.5% on week to 2 million tonnes as of November 24.

Domestic HRC prices are likely to climb in the near term, as most mills are tending to firm their offering prices to offset high production costs, the first analyst said

Written by Villanelle Xia, xiayi@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

From:Mysteel Global