A Shanghai-based source shared production after maintenance pauses. Accordingly, HRC output increased by 56,200 tons, or 1.8%, week on week, and the rolling capacity utilization rate increased by 1.44 percentage points week on week accordingly, to 79.57% as most mills in North and Northeast China resumed operations.
HRC demand continued to contract as traders and end-users alike acted cautiously with supplies, just days before the Chinese New Year (CNY) holiday from Jan. 31 to Feb. 6.
As of January 14, China's Q235 4.75mm HRC domestic price increased by Yuan 46/tonne ($7.2/t) week on week to 4,864/t including 13% VAT.
In line with the rising spot HRC price, the most traded May 2022 HRC contract on the Shanghai Futures Exchange rose 127 Yuan/ton from the January 7 settlement price and closed the day trading session at 4,772 Yuan/ton on January 14.
HRC prices are expected to soften in the near term, as inventories in commercial warehouses are likely to increase due to sluggish demand and stable supply.
HRC inventories reversed after six weeks of decline and increased by 3,000 tons week on week to 797,500 tons as of January 12.
According to information from some sources, HRC inventories in commercial warehouses in 33 cities of China decreased by 12,100 tons, or 0.5 percent week on week, to 2.2 million tons as of January 13.
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