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SunSirs: Color Coated Sheet Prices Ran at a High Level and the Market Mentality Tended to Be Cautious
September 02 2020 08:18:06SunSirs(John)

Price trend

According to statistics from SunSirs, as of August 31, the spot price of 0.5*1200*C color coated sheet of Baogang in Shanghai was about 7,675 RMB/ton, up 0.52% from last Friday (August 28) about 40 RMB/ton, compared with the beginning of the month, it rose by 4.64% about 340 RMB/ton. The price of color coated sheet rose rapidly in the first half of August, and gradually narrowed towards the end of the month.

Analysis review

As for steel mills, as of the 28th, the operating rate of the national color-coated steel mills remained stable at 90.09%, and the capacity utilization rate was 75.61%, down 0.62% from last week. The weekly output of steel mills was 209,200 tons, down 0.81% about1,700 tons from last week. Towards the end of the month, due to the August settlement price issued by steel mills, merchants tended to be cautious, their intention to adjust prices weakened, and the price increase of color coated sheets narrowed. Some steel mills in the north have introduced plans to stop production and overhaul. It is expected that future production will be affected and some resources of downstream distributors will be in short supply. In terms of raw materials, on the 31st, some common carbon billets in Tangshan area increased by 10 yuan, the ex-factory price including tax was 3,460 RMB/ton, and the ex-factory price of rectangular billets was 3,480 RMB/ton. Benxi Iron and Steel and other steel mills released price adjustment information, and the willingness to maintain the price remained strong.

In terms of inventory, as of the 28th, the color-coated coil market inventory was about 186,900 tons, a decrease of 2,400 tons from last week. The steel mill inventory was about 159,300 tons, a decrease of 14,000 tons from last week. The total inventory was about 346,300 tons. , A month-on-month decrease of 3,800 tons from last week. Among them, North China has the largest increase in inventory, with an increase of 1.69% month-on-month by approximately 0.03 million tons from last week. Central China has the fastest rate of inventory reduction, with a decrease of 4.06% from last week to approximately 1300 tons.

In terms of demand, according to statistics from the China Association of Automobile Manufacturers, the output of passenger vehicles by 11 key automobile companies across the country in early August was 934,000 tons, down 16.1% from the same period in July, and sales were 825,000 tons, up 0.1%from the same period in July; commercial vehicle production was 177,000 tons, down 14.2% compared with the same period in July, and sales of 114,000 tons, down 2.7% compared with the same period in July.

In terms of market, the spot price of color coated sheet fluctuated upward in August and remained high. However, the terminal demand market did not show any significant improvement. Inventory was mainly transferred from steel mills to distributors, in the absence of a big deal, the continued high prices have aroused the cautious attitude of downstream purchases. On the whole, transactions were made on demand. In terms of futures, on the 31st, the main hot-rolled coil 2010 contract was running at a high level, and finally closed at 4,011 RMB/ton, an increase of 66 RMB/ton or 1.67% from the previous trading day.

Market outlook

The total inventory of color coated sheets continues to decline steadily, and steel mills' shutdown and maintenance plans are successively introduced. It is expected that future production will decline, and there will be some resource shortages in the market to support spot prices. However, downstream demand is tepid, and the wait-and-see sentiment is strong, and the overall price increase rate is gradually narrowing, the price of color coated sheet is expected to fluctuate at a high level in the short term.

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