HRC prices in China show resiliance against lower output

This rebound can be attributed to decreased production levels, offsetting growing concerns about weak demand. According to official December data, China, the world's leading steel producer, witnessed a 15% year-on-year and 11% month-on-month decline in steel output, reaching a six-year low of 67.44 million tonnes. This trend aligns with diminishing profit margins for steel producers, influenced by macroeconomic challenges and reduced manufacturing demand, casting shadows on the commodity's outlook for the upcoming year.

The decline in steel demand is evident as stocks of hot coils in Chinese warehouses increased by 12% to 383,916 thousand tonnes, indicating subdued purchasing from factories. Even though the data was negative, the Chinese government still seemed unsure about how much economic help to provide to the industry. The unexpected refrain of the People's Bank of China from lowering medium-term interest rates underlined this uncertainty.