Price trend

The domestic market for mild steel plates showed a slight weakening overall, with moderate price fluctuations. This was primarily due to the suspension of downstream demand and steel mill shutdowns. Traders mainly focused on maintaining stable prices and shipping existing stock, with limited room for price concessions. According to SunSirs' commodity market analysis system, the price of general-purpose mild steel plates (material: Q235B; specification: 20) was 3,196 RMB/ton on February 6th, a decrease of 0.31% compared to Monday.

Influencing factors

Steel Billet Market: Last week, the domestic raw material steel billet market remained stable overall, supported by the price-locking policy implemented in the Tangshan region during the Spring Festival, with only minor adjustments in some areas. As of February 6th, the price of ordinary billets in Tangshan was 2,930 RMB/ton (including tax), with only minor adjustments observed at the end of the trading day. The core factors affecting the steel billet market last week were: firstly, the continued effectiveness of the Tangshan price-locking policy, which effectively prevented a significant decline in steel billet prices; secondly, the concentrated shutdown of downstream billet-consuming industries, resulting in a substantial decrease in operating rates for manufacturers of mild steel plates and sections, and a near-stagnation of procurement demand. Market transactions were mainly limited to small quantities of spot goods, restricting the upward potential of steel billet prices; thirdly, the fluctuating and weakening futures market exerted some downward pressure on the spot steel billet market, leading to minor adjustments in some areas at the end of the trading day, but the overall impact was limited.

Supply and demand

Last week, the off-season effect on demand for mild steel plates reached its peak, with overall demand showing a trend of "rapid contraction and gradual shutdown." Market transactions remained sluggish, with only a very small number of companies making emergency purchases to meet essential needs. Speculative demand was completely absent throughout the period, making it difficult for transaction volumes to increase. This was primarily due to the concentrated shutdowns and holidays among downstream companies.

Last week, the supply-demand imbalance in the mild steel plate market became more pronounced, with inventories showing a slight increase. Overall inventory pressure rose moderately but remained within a controllable range. The core reason was that "the magnitude of supply contraction was less than the magnitude of demand stagnation," and this also presented a structural characteristic of "a slight accumulation of plate inventories and a significant increase in construction material inventories."

Market outlook:

Overall, bullish and bearish factors were largely balanced last week, and prices are expected to remain weak but stable. Some areas may see slight price reductions due to inventory pressure, but the extent will be limited, with overall price fluctuations controlled within 5-10 RMB/ton. The market will mainly focus on digesting inventory and waiting for the end of the Spring Festival holiday.

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