Hot-rolled coil supplies to expand 0.73% in Jul as margins recover

SHANGHAI, Jul 9 (SMM) – Production of hot-rolled coil across major steelmakers in China is expected to only inch up in July, as increases from a shift from cold-rolled production, maintenance recovery and wider margins will be largely offset by anti-smog production curbs.

Those mills plan to produce a total of 9.59 million mt of HRC this month, up 0.73% from realised output of 9.52 million mt in June, showed an SMM survey.

About 625,000 mt would be exported, and this is up 4.5% from a month ago. Volumes slated to enter domestic markets are likely to grow 0.5% to 8.97 million mt.

About 300,000 mt of hot-rolled products have been produced via production lines that were originally designed for cold-rolling since June, as cold-rolled products incur losses.

HRC production in July is also likely to receive a boost from a recovery from maintenance at smelters.  

Improved production enthusiasm will also account for the anticipated growth in HRC production, as production curbs in Tangshan and a trade truce between the US and China bolstered spot prices and recovered steelmaker margins.

HRC production from Tangshan, however, is expected to sharply fall this month, amid deepened curbs across the region to fight air pollution.