On the 27th, the prices of profiles and hot coils are mainly stable, and some merchants have reduced prices and shipped operations. The recent start of steel mills has been relatively stable, and steel production has grown rapidly. Therefore, despite the continued decline in the steel market inventory, many businesses are generally not optimistic about the market before and after the holiday.

In terms of cost, billet prices were quoted at RMB 3090 on the 27th, up RMB 10 from yesterday. The cost of raw materials has risen, and the manufacturers' willingness to increase prices has been firm, but the output of steel mills has increased significantly, which is not conducive to rising prices of finished products. According to relevant data from the China Steel Association, in the first quarter of 2020, China's crude steel output was 234.54 million tons, an increase of 1.2% year-on-year; steel output was 267.42 million tons

In the market, the billet prices rose in early trading on the 27th, and the price of the snails opened higher, but then fell again, maintaining a volatile trend throughout the day. Therefore, merchants in the spot market have a strong wait-and-see mood. Affected by the health incidents in the early stage, domestic real estate, infrastructure construction, automobile and other industries have generally declined. After mid-March, as downstream demand was released and goods flowed smoothly, inventory began to decline. However, due to the faster growth of steel output, the destocking process has been significantly prolonged. And according to the inventory data released by Bank Steel on the 27th, the five largest inventories have decreased by 1.65 million tons. At present, the decline in inventories has slowed, but if it can be maintained at this rate until June-July, steel inventories can be reduced to the same level last year. However, the recruitment season has come to an end, and the demand in May of the previous year may be reduced due to seasonal weather. You need to pay more attention to the later transaction and inventory data.

At the same time, many merchants reported that the current steel prices, their own profits are extremely low, and some of them are withdrawn funds; there is a loss of shipping operations. The downstream is facing a lot of higher inventory than in the previous period, so the purchase is cautious, mostly based on demand, and the market transaction situation is general.

Overall, the steel cost support is strong, and the market's trend of downsizing remains, but the rapid growth of steel output is not conducive to market destocking. Faced with much higher inventory than the previous period, the downstream is more worried about the later view, and it is expected that the short-term shock of the profile hot coil price will weaken.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com