Price trend:

Last week, hot rolled sheet and coil prices initially fell and then rose. According to the SunSirs commodity market analysis system, as of November 28, the average price of domestic hot rolled coil was 3,320 RMB/ton, showing a trend of stabilization compared to the previous week; the average price of domestic cold rolled sheet 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 322.88 tons, a decrease of 12,100 tons week-on-week, and the weekly output was 3,190,100 tons, an increase of 30,000 tons week-on-week; last week's social inventory of cold rolled steel was 1,320,300 tons, a decrease of 11,700 tons week-on-week, and the weekly output was 845,300 tons, an increase of 5,700 tons week-on-week.

Last week, the inventory of steel billets in Tangshan's main warehouses and ports was 1.2167 million tons, a decrease of 7,800 tons week-on-week.

Last week, the supply of the five major steel products was 855.71 tons, an increase of 58,000 tons or 0.7% week-on-week; total inventory was 14,008,100 tons, a decrease of 322,900 tons or 2.25% week-on-week; weekly consumption was 8,880,000 tons, a decrease of 0.7%; among which, building material consumption decreased by 0.3% week-on-week, while plate consumption increased by 2.3% week-on-week.

Cost side

On the supply side, the supply of the five major steel products last week totaled 8.5571 million tons, an increase of 58,000 tons week-on-week, representing a growth of 0.7%. Except for rebar, the output of all five major steel products decreased week-on-week last week, primarily driven by a rebound in output after steel mill maintenance. Regarding inventory, the total inventory of the five major steel products last week was 14.0081 million tons, a decrease of 322,900 tons week-on-week, a drop of 2.25%. The total inventory of the five major products decreased week-on-week: mill inventory decreased week-on-week, mainly due to rebar. Social inventory also decreased week-on-week, with the decrease also mainly due to rebar. On the consumption side, the weekly consumption of the five major steel products this week was 8.88 million tons, a decrease of 0.7%; among which, construction material consumption decreased by 0.3% week-on-week, while plate consumption increased by 2.3% week-on-week. Last week's apparent consumption of the five major steel products showed a trend of decreased construction material consumption and increased plate consumption.

According to Mysteel statistics, in the construction materials sector, taking rebar as an example, from the three major regions, East China, South China, and North China saw week-on-week inventory reductions of 41,600 tons, 89,600 tons, and 21,500 tons respectively; from the seven major regions, all regions except North China showed a reduction in inventory. Regarding hot-rolled coil, from the three major regions, East China and North China saw week-on-week inventory accumulations of 7,000 tons and 100 tons respectively, while South China saw a week-on-week inventory reduction of 19,200 tons; from the seven major regions, all regions except South China, Southwest China, and Northeast China showed an accumulation in inventory.

Market Forecast:

On the supply side, steel mill profits improved recently, and some mills resumed production after maintenance shutdowns, resulting in a slight increase in output for the five major steel products this week.

On the demand side, according to a survey by 100-year construction company, as of November 25, the funding availability rate for sample construction sites was 59.56%, a decrease of 0.24 percentage points week-on-week. Specifically, the funding availability rate for non-building construction projects was 60.68%, a decrease of 0.43 percentage points week-on-week; while the funding availability rate for building construction projects was 53.99%, an increase of 0.70 percentage points week-on-week. The decline in funding availability was mainly dragged down by non-building construction projects, which saw the largest drop in funding for non-building construction projects in nearly three months, indicating a continued weakening of demand during the off-season.

Regarding inventory, total inventories of rebar and hot rolled coil decreased, but the overall destocking rate slowed. Inventories of the five major steel products remained higher than in previous years, indicating continued inventory pressure.

Overall, finished steel demand had entered the off-season, increasing pressure for a subsequent rebound. The overall market showed weak supply and demand, with no significant fundamental contradictions. It is expected that ferrous metal prices will fluctuate in the short term.

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