Price trends
According to the commodity market analysis system of SunSirs, the domestic market for color coated steel coils the week before last was characterized by flat average weekly prices but intraday fluctuations that trended weaker. Prices initially saw a tentative, slight rise but gradually fell back during the latter half of the week as raw material prices weakened; the market exhibited a distinct pattern of "stable on the surface but declining underneath." The market price for color coated steel stood at 6,450 RMB/ton on June 15 and remained at 6,450 RMB/ton on June 19, representing a decline of 0.769% from the previous week and a 2.02% drop compared to the same period last year.
Analysis and Commentary
Galvanized Sheet: Prices for galvanized sheet saw a slight decline last week; as of Friday (June 19), the price stood at 4,190 RMB/ton, down 0.238% from the week before last but up 1.946% year-on-year. Downstream demand in the coated sheet market remained tepid, resulting in sluggish trading activity.
Cost side: Raw material price levels shifted downward, weakening cost support.
1. Cold-rolled substrate: Over the weekend, mainstream cold-rolled substrate traded at 3,270 RMB/ton in Tangshan, down 20 yuan week-on-week. Upstream hot-rolled coil futures fluctuated weakly throughout the week; raw material traders actively lowered prices to destock, resulting in ample market supply. Downstream procurement was limited to small, as-needed restocking, with no significant stockpiling activity.
2. Zinc and coating auxiliaries: SHFE zinc prices fluctuated narrowly, failing to provide a meaningful boost to costs. Quotes for specialized color-coating paints remained stable with a slight downward bias; combined with the weakening substrate market, overall production costs edged down, undermining the ability to maintain finished product prices. However, raw material costs retain a firm floor, limiting the scope for a sharp decline.
3. Steel mill profits: Processing fees for color coated steel remained low, and private steel enterprises saw meager profits. While the drop in raw material prices slightly eased cost pressures, insufficient end-market demand prevented any actual improvement in profitability.
Supply side: Operating rates remained high; inventories were accumulating moderately
Production schedules across major domestic color coated steel lines remain stable, with sample capacity utilization holding above 61%—a high level for this time of year over the past three years—and no plans for concentrated maintenance or output reductions; supplies of standard specifications are plentiful, with no resource shortages. While steel mills continued normal shipments during the week, the pace of downstream purchasing slowed, leading to a slight, simultaneous buildup of both mill and market inventories. Traders prioritized rapid turnover, inventory reduction, and capital recovery, resulting in an increase in low-priced sell-offs, while ample supply continued to cap the potential for price rebounds.
Demand side: Significant suppression due to the off-season; driven primarily by essential demand, with no increase in volume
Demand remained sluggish last week, with the seasonal off-peak period acting as the primary factor weighing on the market:
1. Construction envelope sector: Persistent rainfall in the south and high temperatures in the north hindered outdoor construction work on factory buildings and roofing. Consequently, steel structure and color coated steel tile enterprises limited their purchasing to essential restocking needs, and bulk inventory accumulation virtually ceased; even with price-cutting promotions by vendors, the increase in procurement volume remained negligible.
2. Home Appliance Manufacturing: The home appliance industry has entered its traditional off-season; orders at finished-product manufacturers have contracted, and internal procurement volumes for color coated sheets have declined month-on-month, with purchasing primarily conducted in batches based on immediate demand.
3. Export Market: The impact of overseas trade barriers continues to intensify. Turkey has imposed high, long-term anti-dumping duties on Chinese color coated sheets, while Japan and South Korea have simultaneously introduced restrictive policies on cold-rolled sheet products. Traditional export channels to the Middle East are obstructed, and growth in export orders remains insufficient; furthermore, some goods originally intended for export are flowing back into the domestic spot market, exacerbating domestic supply pressure.
Market Outlook:
In the short term, prices for color coated sheets and coils will likely continue to fluctuate within a narrow, slightly bearish range, supported by cost floors but constrained by weak demand. Barring a significant surge in raw material costs or a wave of concentrated restocking by end-users, the price level is prone to a slight downward drift, and a sharp rally is unlikely to occur.
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