Price trend:

Last week, prices for mild steel plates showed a weak downward adjustment. The core driving factors behind the price fluctuations included two aspects: firstly, negative factors, such as insufficient end-user orders leading to weak market transactions, strong willingness among traders to reduce inventory by selling, and downward pressure on spot prices; secondly, positive support, such as maintenance at some steel mills in certain regions leading to localized resource shortages, coupled with the temporary stabilization of raw material prices, which provided some support to prices and limited the extent of the decline. According to SunSirs' commodity market analysis system, the price of ordinary mild plates (material: Q235B; specification: 20) on December 19th was 3222 RMB/ton, a decrease of 0.31% compared to last Friday.

Influencing factors

Steel billet market: Last week, domestic steel billet prices showed a weak trend. The price of ordinary billets in Tangshan, including tax, was 2,950 RMB/ton, a decrease of 10 RMB/ton compared to the end of the week before last. Market transactions were average, and spot prices eased slightly.

Regarding demand, last week's demand for mild steel plates continued to exhibit the characteristic of "overall weakness with localized recovery." The off-season atmosphere intensified, and the total amount of terminal demand released was limited. Only some regions experienced temporary restocking demand due to policy influences or accelerated construction schedules, which was insufficient to change the overall weak market situation. From an industry perspective, downstream industries such as infrastructure, steel structures, and construction machinery showed divergent performance: In the infrastructure sector, project commencement rates remained low in northern regions due to cold weather, with commencement rates in areas like Beijing-Tianjin-Hebei below 45%, resulting in persistently low procurement volumes; in southern regions, pre-holiday construction work was largely completed, leading to a significant decrease in new orders, with only a small amount of restocking for finishing projects. Demand in the steel structure and construction machinery industries was also weak, with insufficient order reserves and a slowdown in procurement pace. Purchases mainly consisted of small and scattered orders, lacking the support of large-scale bulk purchases.

Regarding inventory, last week's inventory of mild steel plates showed a structural characteristic of "slight increase in social inventory and a larger decrease in steel mill inventory." Overall inventory pressure remained manageable and was lower than the same period in the past three years, providing some support for prices. Specifically, the data shows that as of December 19th, the total national social inventory of mild steel plates was approximately 2.4394 million tons, a slight increase of 0.56% compared to the previous week.

Market Outlook

Negative factors are dominating the short-term trend: Firstly, the off-season atmosphere on the demand side is further intensifying. Low temperatures continue in northern regions, making it difficult to increase the start-up rate of infrastructure projects. Construction work in southern regions is completely winding down, and end-user demand will further contract, making it difficult to improve the weak market transaction situation. Secondly, supply-side pressure remains. Last week, the total output of mild steel plate steel mills nationwide remained high. Although some production lines have maintenance plans, the overall maintenance intensity was limited, and the market supply of resources is sufficient, making it difficult to alleviate the supply-demand imbalance. Thirdly, the support from raw material costs is weakening. Earlier, coking coal futures fell sharply, the second round of coke price reductions has been implemented, and billet prices are running weakly. The cost support for mild steel plates is insufficient, further exacerbating downward price pressure. Overall, domestic mild steel plate prices are expected to continue to operate weakly next week.

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