SunSirs: Rebound Ability Was Insufficient, the Prices of Hot Rolled Coils and Cold Rolled Sheets Were Weaker (June 10-14)

https://www.chemnet.com   Jun 18,2024 SunSirs

Price trend

This week, the hot rolled coils and cold rolled sheets market fell first and then rose, with overall fluctuating to be weaker. In the first half of the week, it was affected by the external environment. On the first working day after the Dragon Boat Festival, the ferrous metal futures opened at a low price. In addition, the price of the raw material end of the double coke fell, driving the spot price down. Due to the obvious off-season effect, the spot trade was weak, and the steel price fell weakly. In the second half of the week, market sentiment slightly improved, with small-scale demand released downstream and lower level trading volume increased. Hot rolled coils and cold rolled sheets prices slightly increased. According to the Commodity Market Analysis System of SunSirs, as of June 14th, the average price of hot rolled coils in the domestic market was 3,814 RMB/ton, a decrease of 0.88% compared to the previous week; The average price of cold rolled sheets in the domestic market was 4,257.5 RMB/ton, a decrease of 0.12% compared to the previous week.

Factors affecting price changes:

Fundamentals

According to the latest data learned by SunSirs, the social inventory of hot rolled products this week was 3.2459 million tons, a decrease of 3,600 tons compared to last week. The weekly production was 3.2765 million tons, an increase of 21,300 tons compared to the previous week; This week, the social inventory of cold rolled was 1.4739 million tons, a decrease of 0.31 million tons compared to last week. The weekly production was 860,100 tons, an increase of 13,700 tons compared to the previous week.

This week, the supply of hot rolled coils and cold rolled sheets had slightly increased, and the overall inventory in the market had slightly decreased. In the context of weak demand for construction steel and good manufacturing and exports, molten iron flowed into the sheet metal. As production continued to increase, the pressure on steel mills to ship increased again, and the transfer of sheet metal resources to the market and terminals was not smooth. At the same time, due to the off-season, the overall inventory pressure increased.

Cost side

This week, iron ore prices fell first and then rose, fluctuating and falling back, with a month on month decrease of 2.46%. This week, the production of molten iron increased, which boosted the market confidence. However, the inventory of iron ore at ports remained high, making it difficult to destock. In addition, steel mills still had average replenishment power during the off-season of production, and it is expected that iron ore prices will remain stable and tend to be weaker in the short term.

This week, the second round of domestic coke price reduction of 50-55 RMB/ton had basically been implemented. The profits of coke enterprises continued to compress, and some coke enterprises had slightly limited production, with a slight decline in supply. In terms of demand, steel mills had poor profits, and the steel market had entered the off-season. Terminal demand was average, and coke procurement was cautious, mainly based on demand. It is expected that the coke market will stabilize and weaken next week.

Market outlook

The contradiction between strong supply and weak demand was gradually becoming prominent. With the deepening of the off-season, the demand for terminal procurement was sluggish, and shipments were generally not smooth, dragging down the prices of hot rolled coils and cold rolled sheets and suppressing the height of price rebound. From the perspective of raw materials, the prices of raw materials had decreased and adjusted, and the market cost support was insufficient. It is expected that the prices of hot rolled coils and cold rolled sheets will be volatile and weaker in the short term.

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