Over March 3-9, total production of hot-rolled coil (HRC) among the 37 Chinese flat steelmakers under Mysteel's tracking reached a 2.5-month low of just 2.95 million tonnes, mainly as some mills in North China were under production curbs during the Winter Paralympic Games over March 4-13 and the Two Sessions political meetings in Beijing over March 4-11.
During the latest survey period, China's HRC output slumped by 221,400 tonnes on week, and the rolling capacity utilization rate at these surveyed mills eased accordingly by 5.66 percentage points on week to 75.35%.
However, HRC output is seen growing in the near term, with the close of both events last week, a Shanghai-based source shared.
China's domestic price of Q235 4.75mm HRC under Mysteel's assessment reached a four-month high of Yuan 5,289/t ($826.4/t) as of March 7, before retreating to Yuan 5,171/t as of March 11 or down Yuan 7/t on week. Both prices include the 13% VAT.
Demand from steel end-users was constrained by the surge in HRC prices at the start of last week. Some traders were willing to trim their offering prices to secure some margins later in the week, the source remarked, but suggested that the room for HRC prices to decline further is limited, chiefly because of the mills' high production costs.
Hot coil stocks at the commercial warehouses in the 33 Chinese cities under Mysteel's survey slipped by 4.3% or 114,900 tonnes on week to 2.55 million tonnes as of March 10. The decline in stocks at the traders indicated that demand from end-users picked up in a way, he added.
Hot coil inventories held by the 37 surveyed steelmakers also dropped by 32,300 tonnes on week to 883,300 tonnes as of March 9, mainly due to low supply from steelmakers, the source added.
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