Production of hot-rolled coils (HRC) among the 37 Chinese flat steel producers Mysteel regularly monitors remained largely stable at 3.25 million tonnes during May 13-17, inching down by just 4,600 tonnes or 0.14% on week, Mysteel's latest weekly production survey shows.

The hot-rolling capacity utilization rate among the 37 mills also moved lower by 0.12 percentage point on week to average 82.94% last week, the survey found. Some steel producers in East China slowed their hot coil production during the sample period, which resulted in the slight on-week decline in HRC output, survey respondents noted.

Meanwhile, some mills in North China stepped up deliveries of their HRC last week, respondents added. Consequently, total stocks of hot coils at the 37 surveyed mills decreased by 4.15% on week to 854,000 tonnes as of May 16, according to Mysteel's tracking.

In parallel, HRC inventories at commercial warehouses in the 33 Chinese cities regularly monitored by Mysteel were 0.64% lower on week at 3.3 million tonnes as of the same day, reflecting end-users' cautious buying after sellers raised their HRC offer prices.

China's issuance of ultra-long-term special treasury bonds and the announcement of a stimulus package for the property market buoyed market confidence during the second half of last week, lifting major ferrous commodities prices including HRC, Mysteel Global learned.

By May 17, China's spot price of Q235 4.75mm HRC under Mysteel's assessment had gained Yuan 20/tonne ($2.8/t) or 0.52% on week to reach Yuan 3,840/t including the VAT. On the same day, the Shanghai Futures Exchange's most-traded HRC futures contract for October delivery closed the daytime trading session at Yuan 3,849/t, up by Yuan 52/t or 1.4% from the May 10 settlement price.