Ex-factory prices of hot-rolled coil (HRC) for spot purchases for forward delivery, surged across China in June. Cost pressures prompted major producers of HRC to raise HRC ex-factory prices.
With potental inventory pressure in the near term, traders were keen to destock or even to sell cargos in transit. Current inventories in China’s major markets stand at lows, with some specifications nearly depleted.
At Benxi Iron & Steel, base prices grew an average 200 yuan/mt for north-east China, 250 yuan/mt for the north, and 350 yuan/mt for the east. June’s ex-factory price of HRC with a diametre of 5.5mm stood at 4,920 yuan/mt without tax.
With high profits, orders at steel mills grew steadily since the start of May. Yanshan Iron & Steel received orders for some 22,000 mt of HRC each day. Among them, some 2,000 mt came from south China, 2000 mt from the north, and 18,000 mt from the east.
At Rizhao Steel, its production line for 1250mm-width HRC will undergo maintenance after high margins kept it operating at full capacity for an extended period. Maintenance will begin on May 27 and last for 15 days. The line last underwent maintenance in 2016.