Short-term cold and hot rolled coil market will be dominated by small oscillations

Recently, the domestic cold, hot rolled coil market prices rise and fall, frequent shocks, steel traders are basically cautious about the market after the market." On May 31, Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd. said in an interview with a reporter from China Metallurgical News that the cold and hot rolled coil market prices are expected to run in a small oscillation in the short term.

According to Li Zhongshuang, recently, the Shanghai market price of hot rolled coil rose significantly, cold rolled coil prices fell slightly. From the trading situation, steel traders generally feel poor sales, transactions are mostly concentrated in low-priced resources, high-priced resources shipping difficulties, downstream end-users are more cautious procurement.

For the later cold, hot rolled coil market situation, Li Zhongshuang that, in the short term, cold, hot rolled coil market will maintain the current operating trend, will continue to oscillate, but the amplitude of the oscillation will not be too large.

From the demand side, the recent weak steel demand situation has not changed significantly. Automobiles, home appliances and other manufacturing production and sales conditions have not improved significantly, production and sales continue to decline. According to the passenger car market information association estimates, in May the domestic narrow sense of the passenger car retail sales of about 1.65 million units, down 5.3% year-on-year. Previously, the Ministry of Commerce, the Ministry of Finance and other seven departments jointly issued the "Automobile Trade-in Subsidy Implementation Rules" to clarify the automobile trade-in capital subsidy policy, since May 1, the localities have also begun to step up the implementation of the national policy of scrapping and renewal, the scrapping and renewal of the rules of the localities is basically the same as the national standard, part of the provinces, such as Guangdong, Guangxi, Hunan, etc., in the national subsidies for scrapping and renewal of the basis of the other to provide the replacement of renewed Some provinces, such as Guangdong, Guangxi and Hunan, provide replacement subsidies on top of the national scrapping and renewal subsidies in order to further boost the automobile market. However, the impact of the policy has not yet been realized because it takes time to buy a new car from scrapping. Li Zhongshuang said that the car market recovery is weak, the cold, hot rolled coil demand intensity has also weakened, supporting the rise in steel prices is not enough power.

From the supply side, the recent market supply continues to be strong. Steel enterprises to limit production, production control effect is not obvious, production to maintain the growth trend. China Iron and Steel Industry Association data show that in mid-May, the key statistics of steel enterprises produced a total of 22.0922 million tons of crude steel, pig iron 19.77868 million tons, 21.207 million tons of steel. Among them, the average daily production of crude steel reached 2,209,200 tons, an increase of 0.81% month-on-month.

In the supply increase at the same time, cold and hot rolled coil social inventory also continued to grow. According to statistics, as of May 24, in the country's 29 key cities in the social inventory of steel, hot rolled coil inventory of 2.8508 million tons, an increase of 0.63% year-on-year growth of 10.02%; cold rolled coil inventory of 1.4874 million tons, an increase of 3.27% year-on-year growth, an increase of 25.36%. It can be seen that the current cold and hot rolled coil supply pressure, inventory pressure is still not small.

From the cost side, recently, iron ore, coke, scrap and other raw steel fuel prices fluctuated. As of May 24, Shandong Qingdao port 61.5% PB powder offer 886 yuan / ton, up 5 yuan / ton, is still in a higher position; coke a new round of price reductions landed, the rate of reduction of 100 yuan / ton to 110 yuan / ton; scrap steel market prices run strong, up 30 yuan / ton to 60 yuan / ton. Li Zhongshuang said that the current steel raw fuel prices are still at a high level, the pressure on the production costs of steel enterprises has not been reduced, therefore, in determining the ex-factory price of steel is basically to support the main price. Some large steel enterprises will be June hot-rolled base price increased by 50 yuan / ton, which also to a certain extent to curb the late cold, hot-rolled coil market prices fell sharply.

Li Zhongshuang said that overall, the current cold, hot rolled coil market presents a "strong supply and weak demand" situation in the short term is difficult to change, cold, hot rolled coil market prices will still be dominated by small oscillations.