The price of carbon steel hot-rolled coil (HRC) price
in China's physical market under Mysteel's assessment reached a 16-month low
last week, mainly due to sluggish demand from end-users and bearish market
sentiment, market sources shared.
The price of Q235 4.75mm HRC plunged by Yuan
235/tonne ($35.2/t) on week to a 16-month low of Yuan 4,662/t including the 13%
VAT as of June 17.
With the softening in HRC prices on Shanghai Futures
Exchange last week, the market sentiment turned bearish accordingly. Most
end-users took on a cautious stance of buying, while traders trimmed their
offering prices so as to boost some sales, but the spot trading volume was
still lackluster, a Shanghai-based source shared.
Some mills cut down their production or conducted
maintenance stoppages last week, given the negative profits they could
currently earn amid the continuously falling spot HRC prices and high
production costs, the source added.
The production of hot coil among 37 steelmakers under
Mysteel's survey reversed from one week of recovery last week, falling by
135,500 tonnes or 4.1% on week to 3.2 million tonnes over June 9-15, while the
rolling capacity rate at these surveyed mills also dropped by 3.46 percentage
points on week to 80.55% as of June 15.
Some mills slowed down their production with few
orders at hand and accelerated the pace of delivery, resulting in the decline
in their stocks, the source noted. As such, HRC inventories held by these mills
had slipped for the third week by another 19,200 tonnes or 2.1% on week to
888,200 tonnes as of June 15, according to Mysteel's assessment.
However, the volume at trading houses Mysteel
surveyed across 132 cities surged by 65,900 tonnes or 2.5% on week to 2.7
million tonnes as of June 16.