Monday, Feb14, 2011
The boost in hot rolled coil capacity witnessed in China through 2009~2010 prompted the country’s HR coil and sheet output last year to surge to 144.63m tonnes, according to National Bureau of Statistics data. This was up by a significant 25.93mt or 22% from 2009’s 118.7mt.
Steel Business Briefing notes that, in 2010 alone, a combined 14m tonnes/year of new HRC capacity was brought on stream, and this year a further 6m t/y will be commissioned. Indeed, China’s HRC output will continue climbing this year in any case as those newly-started hot strip mills gradually reach full operation.
Remarkably however, though HRC output is trending upwards, HRC prices have also climbed since early last September – driven both by Chinese inflationary pressure and by increasing raw materials costs.
Among Shanghai dealers for example, Q235 5.5mm HRC prices have reached RMB 4,780/t ($729/t) with 17% VAT, or RMB 4,085/t without VAT, up almost RMB 800/t from last September.
And because HRC supplies to the domestic market this month will be temporarily affected by maintenance stoppages at some mills, prices will likely climb further after traders resume business on 9 February after the Chinese New Year break.
For example, northern China’s Anshan Iron & Steel will lose about 250,000 tonnes of pig iron output this month due to blast furnace maintenance, denting HRC output as a result. Maintenance on one of its hot strip mills this month will lose east China’s Shagang about 300,000 t of HRC output. Angang and Shagang have informed their trading agents that their February HRC deliveries will only be 35% and 28% of contracted volumes respectively.
(sourced:SAC International Steel,Inc.)
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