Last week, the futures market trended upward amidst volatility, while spot market prices for galvanized steel coils saw steady gains; however, traders reported generally sluggish shipment volumes. According to the SunSirs commodity market analysis system, the domestic average price for galvanized steel coils stood at 4,112.50 RMB/ton as of August 14, marking a slight week-on-week increase of 0.30% compared to the week prior to last.

Fundamentals: Last week, the capacity utilization rate for galvanized steel coils saw a slight decline. Notably, some producers in the southern region halted production to alleviate inventory pressure caused by excessive stock levels, whereas capacity utilization in the northern region remained high. According to the latest data from SunSirs, the overall operating rate for galvanized steel last week stood at 89.94%; the capacity utilization rate was 66.45%, down 0.26% from the week before last; and weekly production totaled 1.1737 million tonnes, a decrease of 4,700 tonnes from the previous week.

Inventory levels saw a slight decline but remained higher than the same period last year. While resource arrivals from the supply side proceeded normally, demand-side release was constrained by high temperatures; end-users largely limited their purchasing to immediate needs, hindering the destocking of social inventories. Last week, steel mill inventories stood at 678,600 tonnes (down 2,200 tonnes from the week prior), social inventories at 1,599,300 tonnes (up 9,500 tonnes), and total inventories at 2,277,900 tonnes (up 7,300 tonnes).

Industry Trends: AVC PSI monitoring data indicates that domestic production schedules for air conditioners in September 2026 declined by 6.5% year-on-year—a narrower drop compared to August—while exports fell by 7.1%. Although extreme heat in Europe drove a temporary surge in demand, high channel inventory levels for split-system air conditioners make it difficult to sustain strong growth in the short term. At the retail level, sales remained under pressure, though the rate of decline eased; AVC's aggregated market data shows that in July 2026, total air conditioner sales volume fell by 9.8% year-on-year, and sales value dropped by 17.8%.

Market Outlook:

While futures prices surged significantly last week, the spot market lacked sufficient momentum to follow suit. August remains a low-demand season, with many downstream enterprises observing "high-temperature holidays"; however, the ordering policies announced by steel mills for September indicate a clear intention to support prices. SunSirs anticipates that prices for galvanized steel coils will likely fluctuate within a narrow range in the short term, with limited upward or downward movement.

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