Price trend:

Last week, hot rolled sheet and coil prices initially fell before recovering. According to SunSirs commodity market analysis system, as of November 14, the average price of domestic hot rolled sheet and coil was 3,320 RMB/ton, showing a trend of stabilization compared to the previous week; the average price of domestic cold rolled coil was 3,960 RMB/ton, a decrease of 1.0% compared to the previous week.

Factors influencing price changes:

Fundamentals

According to the latest data obtained by SunSirs, last week's social inventory of hot rolled steel was 333 tons, a decrease of 200 tons week-on-week, and the weekly output was 3,136,600 tons, a decrease of 45,000 tons week-on-week; last week's social inventory of cold rolled steel was 1,356,500 tons, a decrease of 15,400 tons week-on-week, and the weekly output was 838,400 tons, a decrease of 21,300 tons week-on-week.

Last week, the inventory of steel billets in Tangshan's main warehouses and ports was 1.2393 million tons, a decrease of 21,400 tons week-on-week.

Last week, the supply of the five major steel products totaled 8.3438 million tons, a decrease of 223,600 tons week-on-week, or 2.6%; total inventory was 14.7734 million tons, a decrease of 262,300 tons week-on-week, or 1.7%. The weekly apparent consumption of the five major steel products was 8.606 million tons, a decrease of 0.7% week-on-week: among which, construction material consumption decreased by 1.3%, and plate consumption decreased by 0.4%.

Cost side

Hot rolled coils and plates: According to Shanghai Steel Union's weekly survey data last week, hot rolled coil production decreased by 45,000 tons to 3,136,600 tons, with supply remaining at a high level. Regarding inventory, steel mill inventory increased by 900 tons, social inventory decreased by 200 tons, and total inventory increased by 700 tons, a slight increase compared to the previous week, indicating that inventory pressure remained significant. Apparent demand decreased by 7,100 tons. The weekly supply-demand strength index for hot rolled coils improved compared to the previous week, but supply-demand pressure remains high. Cold rolled coil production increased by 1,200 tons, and mild steel plate production decreased by 15,400 tons. Total inventory decreased by 24,300 tons and increased by 9,200 tons respectively, while apparent demand increased by 10,700 tons and decreased by 26,700 tons respectively, indicating that supply-demand pressure for medium plates remained high.

Market outlook

From an industry-driven perspective last week, although the output of both rebar and hot rolled coil decreased (the second week of steel mill production cuts), weak demand kept their supply-demand strength indices weak, with little change compared to the previous week. Therefore, the price difference between hot rolled coil and rebar is not expected to widen or narrow significantly in the short term, and is expected to fluctuate within a range.

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