SunSirs: Demand Was in the Off-season, and the Cold Rolled Market Was Weak

Price trend

Last week, the domestic cold rolled market prices fluctuated and the overall transaction was light. As of July 5, the mainstream price of 1.0mm cold rolled was 6,012.50 RMB/ton, down 1.39% from last week. Hot-rolled prices are steadily and stronger. The domestic mainstream hot-rolled price was 5,560 RMB/ton, an increase of 100 RMB/ton from last week and an increase of 1.83% month-on-month.

Analysis review

Cost side: In the short term, the supply of coke and iron ore was still tight. Supported by raw materials at the cost side, the quotations of some raw material companies remained high. Affected by the "July 1st" festival, coal loading trucks sent to Shanxi, Hebei, and Beijing stopped transportation, and the company's shipments were not good.

Inventory side: total cold-rolled inventory increased. It is reported that as of July 2, the social inventory of cold-rolled coils was 1,197,500 tons, a week-on-week increase of 7,900 tons, and a month-on-month increase of 14,900 tons; steel plant capacity utilization rate was 81.57%, a week-on-week increase of 0.06%; the actual weekly output of the steel mill was 825,700 tons, an increase of 600 tons from the previous month.

Market end: Hot rolled futures prices are showing a red trend, and the spot market prices are operating stably. However, the current cold rolled market demand is still in the off-season, downstream purchases are sluggish, and transactions are difficult.

Market outlook

On the whole, the recent production restriction of steel mills has a certain supporting effect on prices. The price of hot rolled market will be in a situation that is easy to rise and difficult to fall in the short term; cold-rolled inventory pressure is obvious, and cold-rolled manufacturers are eager to reduce inventory or sell at low prices. It is expected that the price of cold-rolled rolling will remain weak and fluctuate in the near future.

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