Last week, hot-rolled coil futures fluctuated. Early in the week, elevated costs provided bottom support for spot prices, limiting downside movement. Later in the week, although futures prices rose, accumulating inventories increased pressure on most traders to reduce stockpiles. Combined with subdued downstream demand, most traders focused on selling at flat prices to recover capital. According to SunSirs' commodity analysis system, as of September 5, the average domestic price for galvanized sheet and coil stood at 4,205.00 RMB/ton, marking a slight 0.83% decline from the beginning of the week.

Fundamentals: Last week, the capacity utilization rate for galvanized sheet and coil continued its downward trend, indicating a slight decrease in overall supply. However, inventories have risen for several consecutive weeks. Traders report that increased stock levels are creating mounting pressure, forcing them to offer discounts to meet contractual sales targets. According to the latest data from SunSirs, last week's overall operating rate for galvanized sheet production was 78.91%; capacity utilization rate stood at 61.77%, down 1.37% from the previous week; weekly output reached 881,000 tons, decreasing by 19,600 tons compared to the week before. Steel mill inventories totaled 463,000 tons, increasing by 6,000 tons week-on-week. Warehouse inventories of galvanized coil in major domestic markets: 1,209,700 tons, up 38,400 tons week-on-week.

Downstream demand: Market participants report moderate restocking enthusiasm among downstream customers, with purchases primarily driven by immediate needs. Overall demand from the home appliance sector remains lackluster. Terminal demand in the construction industry shows no signs of improvement. Dealers report daily shipment volumes have declined compared to August averages, while some steel mills have reduced order fulfillment volumes. Overall terminal procurement activity remains weak, with most orders placed on an as-needed basis.

Industry Update: By late August 2025, steel inventories at key statistical steel enterprises stood at 14.98 million tons, down 690,000 tons (4.4%) from the previous ten-day period. Up 2.61 million tons or 21.1% from the beginning of the year; Up 200,000 tons or 1.4% from the same period last month; Up 440,000 tons or 3.0% from the same period last year; Up 260,000 tons or 1.8% from the same period two years ago.

Market Outlook: Last week, prices for galvanized sheets and coils nationwide trended downward, with overall market shipments remaining sluggish. Although futures prices saw slight gains, spot prices lacked upward momentum. Actual downstream terminal procurement remained weak. SunSirs anticipates galvanized sheet and coil prices may continue weak adjustments in the near term.

As an integrated internet platform providing benchmark prices, on September 11, the benchmark price of galvanized sheet from SunSirs was 4,207.50 RMB/ton, down 1.06% from the beginning of this month (4,252.50 RMB/ton).

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Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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