Price trend

Hot rolled sheet and coil prices rose before falling last week. According to the SunSirs commodity market analysis system, as of October 24, the average domestic hot rolled sheet and coil market price was 3,340 RMB/ton, a weekly decrease of 0.595%. The average domestic cold rolled sheet market price was 3,932.5 RMB/ton, a weekly decrease of 0.506%.

Factors influencing price fluctuations:

Fundamentals

According to the latest data obtained by SunSirs, the social inventory of hot rolled steel last week was 341.34 tons, up 120,400 tons from the previous week, and the weekly output was 3.2184 million tons, down 14,500 tons from the previous week; the social inventory of cold rolled steel last week was 1.42 million tons, down 15,300 tons from the previous week, and the weekly output was 874,100 tons, down 6,600 tons from the previous week.

Last week, the inventory of same-caliber billets in Tangshan's major warehouses and ports was 1.3413 million tons, a decrease of 9,300 tons from the previous week. Downstream billet processing companies were temporarily purchasing on demand.

Last week, the supply of the five major steel varieties was 8.6532 million tons, a weekly increase of 83,700 tons, an increase of 1.0%; the total inventory was 15.5485 million tons, a weekly decrease of 274,100 tons, a decrease of 1.7%; the apparent consumption was 8.9273 million tons, a month-on-month increase of 2.2%: among them, building materials consumption increased by 4.4%, and plate consumption increased by 1.1%.

Cost side

On the supply side, as of October 17, Mysteel's overall operating rate for hot rolled strip in the Beijing-Tianjin-Hebei region was 63.33%, down 6.67 percentage points from the previous week and 11.67 percentage points from the previous month. Capacity utilization was 71.67%, down 7.19 percentage points from the previous week and 6.81 percentage points from the previous month. Mysteel's operating rate for 145mm strip in Tangshan was 27.27%, down 9.09% from the previous week and 9.09% from the previous month. Capacity utilization last week was 35.25%, down 4.38% from the previous week and 4.38% from the previous month. The operating rate for strip above 232mm was 66.67%, down 25% from the previous week and 25% from the previous month. Capacity utilization last week was 83.58%, down 15.85% from the previous week and 15.29% from the previous month.

In the October settlement period, the output of strip steel production lines declined due to factors such as production restrictions, insufficient sintered ore, routine maintenance of production lines, and adjustment of profit-compressed varieties. However, the maintenance cycle of production lines was usually about a week, and the maintenance was not continuous. The room for capacity reduction was limited. In addition, due to insufficient demand follow-up, strip steel inventory was still in the accumulation cycle. The contradiction between supply and demand of strip steel in October was still acute.

In terms of inventory, Mysteel statistics showed that as of October 17, the total inventory of hot rolled strip steel major market samples nationwide last week was 990,100 tons, an increase of 13,800 tons from last week, an increase of 77,300 tons from the same period last month, and an increase of 522,200 tons from the same period last year.

As for downstream demand, as of October 17, the apparent demand for hot rolled strip in Tangshan last week was 763,000 tons, a weekly decrease of 114,800 tons, a monthly decrease of 172,000 tons, and a year-on-year increase of 10,400 tons.

Market outlook

Market conditions were changing rapidly, prompting manufacturers to adjust production plans based on their own circumstances and market demand, taking into account the impact of order intake and profits. Weekly production of mild steel plate, hot rolled sheet and coil, and strip steel saw varying degrees of increase and decrease last week. Hot rolled sheet and coil and hot rolled strip production decreased by 0.43% and 2.22%, respectively, while  mild steel plate production increased by 2.17%. The profit and loss situations of production enterprises were different. It is expected that the weekly output of mild steel plates and hot rolled strip steel may decrease slightly this week, and the weekly output of hot rolled sheet and coil may decrease slightly.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.