After the stabilization of the decline in April, the domestic cold-rolled market finally ushered in a step-up trend in May. The increase in cold-rolling prices in May was partly due to the continuous decline in the capacity utilization rate of steel mills and the continued decline in inventories, and the relatively tight spot resources in some regions, which led to a reduction in supply and pushed up prices; followed by a sharp increase in the price of raw iron ore, driving The overall price level of the finished product industry chain has risen, which in turn has led to an increase in traders' quotations. Finally, downstream demand has steadily rebounded, transactions have improved, and cold-rolled prices have risen.
According to SunSirs price data monitoring, as of May 26, the average price of Shanghai's 1.0 * 1250 cold rolled coil market was 4020 yuan / ton, a significant decline of 8.87% from the beginning of the month, and the year-on-year decline contracted to 5.74%, but it was still higher than the beginning of 2020 10.96% decline. Before the overall price level returns to the epidemic, it is still too early. Among them, Benxi Iron and Steel 3970-4020 yuan / ton, Anshan Iron and Steel 4050-4100 yuan / ton, Maanshan Iron and Steel 4000-4050 yuan / ton, Wuhan Iron and Steel 3990-4040 yuan / ton. The price gap between different steel mills' supply sources has shrunk significantly compared to the previous one, mainly because most downstream terminal purchasers have lower requirements for steel mills. As long as the quality is consistent, price is the primary consideration, so traders are actively moving goods, making the market high-priced resources. Declining steadily.
Judging from the price comparison chart of hot and cold rolled steel plates, the trend of cold and hot rolled steel bars in the past 3 months has been basically the same, but in the past 2 months, the trend of cold rolled steel has generally lagged behind that of hot rolled steel, and its volatility is greater. Mainly due to the fact that hot-rolled raw materials, apart from the fundamentals, have a greater impact on futures; and the cold-rolled market has only this supply and demand. In addition, although hot rolling is at the raw material end of the cold rolling industrial chain, from the current price level, hot rolling is 3,540 yuan / ton, cold rolling is 4,020 yuan / ton, and the price difference is only 480 yuan / ton; while the normal price difference remains at 700- Around 800 yuan / ton is normal. Once the price difference is lower than 700 yuan / ton, the price difference will enter the trough area, and the market may be at risk of large variables. Therefore, in theory, the current price of cold rolling is low, and there is still room for increase.
On the supply side: As of May 22, there were 29 47 cold-rolled production lines nationwide, and the number of suspended production lines was increased to 8 from the previous one. The overall operating rate was 82.98%, which decreased by 2.13% week-on-week, setting a new low level in three months; The overall capacity utilization rate has also dropped to 70.55%, which has been falling for 5 consecutive weeks and hit a new low in two years. This also led to the continuous reduction of the steel mill's weekly output to 714,100 tons, which has also been reduced for 5 consecutive weeks and hit a new low level in two years. Overall, the effect of steel mills' production cuts caused by the sluggish prices in March and April is gradually fermenting, and the supply side continues to decline, resulting in reduced steel mill resources and supporting the increase in cold-rolled prices. However, due to the price increase caused by "supply less than demand", steel mills' enthusiasm for resuming production may increase, and prices are expected to be under pressure in the future.
In terms of inventory: as of May 26, the inventory of 29 cold-rolled steel mills nationwide was 370,400 tons, a decrease of 46,400 tons from the previous week, and a continuous decline of 9 weeks, but the year-on-year increase contracted to 18.08%. In addition, the inventory of 26 major cities in the market was 1.3194 million tons, opening the 7th consecutive decline, but still at a high level. Therefore, from the current point of view, in the past 2 months, the stock of steel mills has been transferred to local stocks in the market. Although the destocking status is not reduced, the sales rate of agreement and contract accounts is still slow. However, it is worth noting that some of the mainstream specifications of 0.9-1.2 are out of stock, and the market's enthusiasm for moving goods has increased, pushing up their prices; while 1.95-2.0 and other specifications are more, causing the price decline to continue. Overall, the market has many positive factors, and continued inventory destocking still supports the growth of cold-rolled prices.
In terms of downstream demand: the automotive industry, the marine industry, and the home appliance industry all showed varying degrees of recovery in April, which in turn pushed up cold-rolled prices.
As the domestic epidemic prevention and control situation continues to improve, the production and sales of the automotive industry have gradually returned to normal levels. The production and sales in April continued to maintain rapid growth, and also ended a year-on-year decline, showing a slight increase. Among them, the year-on-year growth of commercial vehicles is more obvious, and the production and sales volume hit a monthly historical high; the passenger car market has not yet fully launched, and the production and sales volume is still lower than the same period last year.
However, the international epidemic situation is still not optimistic, resulting in the global downturn in the new shipbuilding market. However, the number of new ship orders undertaken by China increased slightly year-on-year. Since April, China's shipbuilding companies have accelerated the resumption of production and production, and the decline in the number of shipbuilding completions and orders for handheld ships has narrowed. Key economic indicators such as total industrial output value of key monitoring enterprises declined year-on-year.
On the other hand, the home appliance industry with an economic barometer suffered heavy losses under the epidemic in the first quarter of 2020. However, with the gradual control of the domestic epidemic, except for the reduction in exports of the home appliance industry due to the impact of overseas epidemics, the domestic market ushered in signs of recovery in April. Although there are signs of different degrees of recovery in the field of home appliances such as color TVs, refrigerators, washing machines, and air conditioners, but sales and average sales prices have declined, indicating that the market is still heavily promoted, and price reductions promote sales to make the market Fast recovery is the main theme.
To sum up, SunSirs cold-rolled analysts believe that the cold-rolled market is currently in a fundamental situation of "tight supply and demand balance", and the current shortage of some resources in the market has strengthened the confidence of traders to maintain prices, so in the short term, prices are still There is momentum to continue rising. On the other hand, although the transaction in the second half of May has weakened compared with the middle, and it is mainly due to the overall decline in finished product futures, which has affected the future market expectations, resulting in the price decline in some regions. The terminal has been buying and not buying and falling. . But the overall demand recovery has begun, and orders will gradually increase in the future, supporting prices. However, during the two sessions, the economic goals were uncertain, and the policy was not released. When the expectations fell, cold rolling or a callback market appeared in early June, and the overall situation in June may be "suppress first and then rise." The price level range is 3900-4000 yuan / ton.
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