Since November, the market prices of cold and hot rolled coils have fluctuated and fallen, and steel traders are generally cautious about the market outlook. On November 19, Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd., predicted in an interview with a reporter from China Metallurgical News that after the market price of cold and hot rolled coils continues to fall, there will be limited room for further decline in the later period.
Li Zhongshuang said that the recent market price of cold and hot rolled coils has “declined a bit”, and downstream end users are affected by the psychology of “buying up but not buying down”, and their willingness to purchase is not strong. As a result, steel traders generally feel that sales are not smooth, and some choose to reduce prices for shipments, resulting in a “bright drop” in the market price of cold and hot rolled coils. Li Zhongshuang believes that the current market prices of cold and hot rolled coils are basically at the bottom after a continuous decline, and there is limited room for prices to fall again, or small fluctuations may prevail. However, market participants still need to focus on some uncertain and unstable factors that affect the market outlook.
First,automobiles, home appliances and other manufacturing industries have weakened demand for hot and cold rolled coils, and there is insufficient power to support the rebound in the market price of cold and hot rolled coils.
The second is the continued decline in market supply. At present, all parts of the country are continuously increasing the efforts of iron and steel enterprises to limit and reduce production, and the output of crude steel continues to decrease. According to statistics from the China Iron and Steel Association, in early November, the daily output of crude steel by key steel companies reached 1,799,500 tons, a decrease of 1.5% month-on-month and 17.26% year-on-year.
In terms of inventory, according to statistics, as of last weekend (November 19), among the total steel stocks in 35 major markets across the country, the total stock of hot-rolled coils was 2,447,700 tons, a decrease of 59,800 tons from the previous week. 2.38%; the total cold-rolled coil inventory was 1,244,700 tons, an increase of 11,800 tons from the previous week, an increase of 0.96%.
In addition, some regions have already initiated measures to deal with heavy pollution weather in autumn and winter, which has brought certain restrictions on the release of local steel production, and the operating rate of blast furnaces and steel production have shown a downward trend.
Third, the support of cost to price is reduced. Recently, the prices of iron ore, coke, and scrap steel have continued to fall. As of November 19, the Platts index of 62% grade of imported iron ore has fallen to US$91.3/ton, the fifth round of coke reduction has gradually landed, and the price of scrap steel has been reduced by RMB 100/ton to RMB 160/ton. Affected by this, the cost of steel production has fallen, prompting steel companies to lower the ex-factory price of steel. For example, recently, a large steel company lowered the ex-factory price of cold- and hot-rolled coils in December. The base price of hot-rolled coils was lowered by 300 yuan/ton, and the base price of cold-rolled ultra-high-strength steel plates was lowered by 200 yuan/ton.
Post time: Nov-29-2021