Price trend

The domestic mild steel plate market showed a slight downward trend overall. The volatile and weakening futures market dragged down the spot market, and traders lowered prices to recover funds, resulting in a slight downward shift in price levels. The overall fluctuations were moderate, and regional differentiation continued. According to SunSirs' commodity market analysis system, the price of ordinary mild steel plates (material: Q235B; specification: 20) was 3,182 RMB/ton on January 23, a decrease of 0.62% compared to Monday.

Influencing factors

Steel Billet Market: Last week, the domestic raw material steel billet market, supported by the Spring Festival price-locking policy in the Tangshan region, showed an overall fluctuating but stable trend, with a slight rebound at the end of the week. This effectively alleviated the downward pressure on the cost side of mild steel plates, contrasting somewhat with the fluctuating and weakening trend of the previous week. As of January 23rd, the tax-inclusive price of ordinary billets in Tangshan was 2930 RMB/ton. The weakening of the steel billet market was mainly due to two factors: firstly, downstream demand continued to shrink. As the Spring Festival approaching, the operating rates of downstream industries using billets, such as mild steel plates and sections, gradually decreased, and procurement demand decreased significantly, resulting in sluggish market transactions and significant pressure on steel billet prices; secondly, the market trading atmosphere was weak. As the Spring Festival approaching, traders and downstream enterprises gradually left the market for the holiday, significantly reducing market participation, slowing down the circulation of steel billets, and lacking upward momentum for prices.

Supply and demand

Last week, the off-season effect on the demand side for mild steel plates became more pronounced, with overall demand remaining weak. Market transactions showed a trend of both volume and price declining, and effective demand further contracted. Only a small amount of essential demand from end-users supported market transactions, while speculative demand was completely absent.

Last week, a slight imbalance between supply and demand emerged in the mild steel plate market, leading to a small increase in inventory. Overall inventory pressure rose moderately but remained within a controllable range, exhibiting a structural characteristic of "divergence between plate and construction material inventories." As of the week ending January 19th, the total inventory of mild steel plates in 14 warehouses across 9 cities nationwide was 707,500 tons, an increase of 6,200 tons (0.88%) compared to the previous week, indicating a slight accumulation of inventory.

Market outlook

The domestic mild steel plate market is expected to maintain a narrow range of fluctuations, with prices remaining largely stable and exhibiting a generally weak but stable trend, and downward pressure further easing. Positive factors include: firstly, the continued effectiveness of the locked-price policy for Tangshan steel billets, leading to a slight rebound in spot prices at the end of the trading day, coupled with the stabilization of other raw material prices such as coking coal, further strengthening cost support for mild steel plates; secondly, the continued release of positive macroeconomic factors, solidifying the "strong expectations" logic; and thirdly, overall inventory pressure is manageable, and the overall trend for plate products is towards inventory reduction, with only moderate accumulation in some areas of mild steel plates. Negative factors include: firstly, the off-season effect before the Spring Festival is reaching its peak, and downstream end-users will fully enter the pre-holiday shutdown period; secondly, traders have a strong desire to recover funds, and as the Spring Festival approaches, most traders will accelerate their sales pace, and some regions may see slight price concessions, but due to cost support, the room for price reductions is limited; and thirdly, the volatile and weak trend in the futures market remains unchanged, still exerting a certain drag on spot market sentiment and failing to provide any substantial boost.

Overall, bullish and bearish factors are largely balanced next week, and the price of mild steel plates will maintain a narrow range of fluctuations and weak but stable performance.

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