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Hot and cold rolled coil market in June or better steel pipe manufactures

Hot rolled coil prices in Shanghai fell 160 yuan/ton week on week, cold rolled coil prices fell 100 yuan/ton week on week. According to Ren qingping, this is mainly caused by the severe situation of epidemic prevention and control, blocked logistics, weakened demand, increased steel inventory, and intensified contradiction between supply and demand in the market. From the downstream industry, affected by the epidemic, many automobile enterprises stopped work, resulting in a decline in automobile production and sales. China’s auto production and sales hit their lowest level in nearly a decade in April, according to the China Association of Automobile Manufacturers. At the same time, the production and sales of home appliance manufacturers are also falling. The output of refrigerators and washing machines, which consume large amounts of cold and hot rolled coils, fell by 10.0% and 8.4% year-on-year in March respectively.

Ren Qingping and other steel traders generally believe that the late cold and hot rolled coil market fundamentals will present the following characteristics:

First, effective demand for downstream terminals is gradually released. In May, the epidemic prevention and control situation in China has improved, with some regions realizing “dynamic zero-out” and local enterprises accelerating the resumption of work and production. According to the Guidelines on Epidemic Prevention and Control for Industrial Enterprises in Shanghai (First edition) released by the Shanghai Municipal Economic and Information Commission, 70% of the city’s 666 key enterprises have resumed work and production. Among them, there are more than 200 automobile industry chain supporting enterprises, accounting for a relatively high proportion.

In addition, the State Council general office recently issued the on further release consumption potential’s opinions on promoting consumption continues to recover, specifically focusing on cars, home appliances, guide enterprises to rural promotion, encourage conditional area to carry out the new energy vehicles and green intelligent home appliances to the countryside, promote charging pile (station) and other supporting facilities. Ren Qingping is expected, late cold, hot rolled coil market demand will gradually improve.

Second, cold and hot rolled coil market supply pressure is not large. Affected by the epidemic, the release of steel capacity is limited. According to statistics, as of early May, the total amount of steel inventory of national key statistics steel enterprises reached 18.749 million tons, an increase of 660,000 tons. At present, steel traders generally have few spot resources, sales pressure is not big.

Third, the rigid cost supports the smooth operation of the late cold and hot rolled coil market. Recently, iron ore, coke, coking coal, scrap and other iron and steel raw fuel prices although some shock, but still in high operation, steel production costs are still high. Raw fuel purchase prices rose for 5 consecutive months, corporate profits were squeezed, prompting steel enterprises to determine the price of steel factory to the main price.

Post time: May-30-2022