Chinese Hot-Rolled Coil Steel Mills Plan To Cut Output In June And Are Pessimistic Over Domestic Demand

SHANGHAI, Jun 13 (SMM) – According to the latest data tracking by SMM, the planned output of 39 mainstream hot-rolled coil steel mills is 14.81 million mt in June, a decrease of 137,300 mt or 0.92% from the actual production in May.

The number of days in June is 1 day less than that in May. The planned average daily output of HRC in June is about 493,700 mt, which is an increase of 11,500 mt or or 2.38% compared with the actual daily output in May.

The planned domestic sales of HRC are 14.21 million mt in June, down 0.67% from the actual sales in May; the planned daily average domestic sales of HRC are 473,900 mt in June, up 2.64% from the actual daily average sales in May. Property data released in mid-May pointed to decline in housing starts, and US debt crisis escalated, causing HRC prices to fall rapidly. At the end of May, there were rumours that China would introduce economic stimulus policies and US debt crisis has temporarily been solved, driving HRC prices to rebound, and end users became more willing to place orders. Lower coke prices also improved steel mills' profits, with most HRC mills reporting real-time profits of 100-200 yuan/mt.