SHANGHAI, Jul 26 (SMM) – While hot-rolled steel prices in the Chinese market remained at highs, prices grew just slightly after Tangshan’s production cuts. SMM attributed this to the low season across the downstream market.
Spot prices of hot-rolled coil as of Wednesday July 26 rose some 70 yuan/mt after the Tangshan government released production cut details on July 11. Prices of futures jumped about 240 yuan/mt, this indicated limited upward momentum in hot-rolled steel spot prices.
Meanwhile, inventories that include social and in-plant stocks across China rose for seven consecutive weeks as of last Thursday July 19.
The low season and high temperatures suppressed downstream demand in July. All major downstream sectors of steel, except for shipbuilding, saw poor orders in July. Environmental probes affected operation in the steel structure industry. Some automakers with significant export businesses completed orders ahead of schedule on fears that US-China trade tension will escalate.
SMM learned that some manufacturers in the downstream sectors gave their workers time off or put equipment under maintenance. A major producer of home appliances told SMM that it began to give workers days off in rotation and put equipment under maintenance, as it received fewer new orders.
Poor cash liquidity also affected demand in some sectors. Stricter financing practices, a longer period for fund recovery and growing investment in environmental protection all weighed on manufacturers.