Over February 3-9, total production of hot-rolled coil (HRC) among the 37 Chinese flat steelmakers under Mysteel's tracking reached a two-month low of 3 million tonnes, mainly due to the production curbs among steel producers in North China, according to market sources.
During the latest survey period, HRC output lost 113,400 tonnes or 3.7% on week, and the rolling capacity utilization rate among these surveyed mills eased accordingly by 2.89 percentage points on week to 76.25%.
Steel producers in North China have been observing continuous production restrictions during the Winter Olympic Games being held in and around Beijing over February 4-20, while more mills conducted maintenance works last week, both of which had led to the fall in output, according to a Shanghai-based source.
Most mills in North China will resume their operations by the end of February, and the recent decline in HRC output lent some support to the prices, he added. As of February 11, China's domestic price of Q235 4.75mm HRC under Mysteel's assessment gained by Yuan 114/tonne ($17.9/t) from February 7 to Yuan 5,125/t including the 13% VAT.
The spot trading improved this week compared to the prior week, though it still remained lackluster in general. Besides, more hot coils for winter restocking had been delivered last week, so stocks at commercial warehouses were piling up, and the tonnage may grow further in the near term amid tepid spot sales, according to the source.
Hot coil stocks at the commercial warehouses in the 33 Chinese cities under Mysteel's survey jumped 297,800 tonnes or 12.3% on week to 2.7 million tonnes as of February 10, while inventories held by the 37 steelmakers under Mysteel's survey gained 3,800 tonnes on week to 959,300 tonnes as of February 9.
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