Price trend

Last week, hot rolled coil futures continued their weak and volatile trend. With the Spring Festival approaching, speculative demand in the market almost ceased, and transactions were concentrated on end-user purchases. Overall demand for galvanized steel sheets and coils continued to shrink. According to the SunSirs commodity market analysis system, as of February 6, the average price of galvanized steel sheets and coils in the domestic market was 4,055.00 RMB/ton, unchanged from the previous weekend.

Market analysis

Fundamentals: Last week, spot prices for galvanized steel sheets and coils continued their downward trend, with downstream demand gradually shrinking. Within the limited sales period, merchants focused on selling off inventory to alleviate pressure from concentrated post-Lunar New Year deliveries. It is also reported that some merchants closed for the week, while most began their Lunar New Year holiday around the 10th. Regarding inventory, as end-users gradually enter their holidays, pre-holiday restocking had largely ended, slowing market digestion and leading to a gradual accumulation of social inventory.

According to the latest data obtained by SunSirs, the overall operating rate of galvanized steel sheets last week was 78.23%; the capacity utilization rate was 63%, a decrease of 0.84% from the previous week; weekly output was 898,600 tons, a decrease of 12,000 tons from the previous week; steel mill inventory was 498,000 tons, an increase of 10,700 tons from the previous week; social inventory was 1,228,100 tons, an increase of 9,000 tons from the previous week; and total inventory was 1,726,100 tons, an increase of 19,700 tons from the previous week.

In terms of market sentiment, merchants were temporarily taking a cautious wait-and-see approach to the future market trend, and their operations were mainly focused on selling off inventory.

Market outlook

With the Spring Festival approaching, upstream and downstream customers in the market gradually began their holidays last week, leading to a situation where there are prices but no transactions. SunSirs predicts that galvanized steel sheet and coil prices will remain largely stable next week.

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