SunSirs: Inventory remains high, short-term HRC prices weaken

On the 23rd, the price of HRC has basically been reduced, with a reduction range of 20-90 yuan / ton, which has weakened and fluctuated as a whole. The impact of the overseas epidemic has further fermented, manufacturing and aircraft manufacturing in many countries have ceased production, the demand for HRC terminals has declined and short-term expectations are poor, and prices continue to decline.

In terms of inventory, last week's (3.13-19, the same below) HRC production was 3.0253 million tons, a week-on-month decrease of 4.71%. The total number of factories and warehouses in 33 cities was 1,562,600 tons, a week-on-month decrease of 5.24%. The total amount of social treasury was 40,408,800 tons, a decrease of 8.1% from the previous week. Last week, there was a double decline in HRC factory warehouses and social warehouses, indicating that downstream demand has gradually improved. However, the total inventory is still at a high level and the destocking cycle is long.

In terms of cost, Tangshan billet was quoted at 3120 yuan / ton on the 23rd, a decrease of 40 from last Friday. The cost price went down, driving the prices of hot rolled coils down, and the total inventory of manufacturers was still high. In the short term, the prices of hot rolled coils were further under pressure.

On the market side, the 23-day volume held a green shock throughout the day. The closing price was 3257, down 124, or 3.67%. Futures prices weakened and costs fell. Panic appeared in the spot market. The spot price fell with costs. At the same time, due to the market The inventory of hot coils is still at a high level, and near the end of the month, the pressure on manufacturers' funds is prominent. The downward trend of hot coils may continue. The wait-and-see mood in the downstream has become stronger. The procurement operation is more cautious and the overall spot transaction situation is poor.

On the supply and demand side, affected by the overhaul of steel plant installations in various regions, the operating rate of HRC mills declined last week, HRC output also declined, and the supply-side shrinkage trend appeared; while the total amount of HRC double inventory declined, and inventory turning points appeared It shows that the downstream demand is further released, the demand is accelerating, and the overall fundamentals of HRC are beginning to improve.

In summary, the downward adjustment of cost prices and the pressure of high inventory levels have caused some panic in the market, and the trend of hot-roll fundamentals has improved. However, the spot price is easily dominated by emotions. It is expected that the short-term HRC prices will weaken and fluctuate, which is optimistic about the medium and long term.

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