Price trend

The domestic mild steel plate market showed a narrow range of fluctuations, initially declining and then rising. The slight increase in futures prices provided temporary support to the spot market, and traders' willingness to maintain prices increased slightly, but the increase was limited. According to SunSirs' commodity market analysis system, the price of ordinary mild steel plates (material: Q235B; specification: 20) on January 16th was 3,202 RMB/ton, unchanged from Monday.

Influencing factors

Steel billet market:

The domestic steel billet market showed an overall volatile and weakening trend. As the Spring Festival approaching, market activity was gradually slowing down. The tax-inclusive price of ordinary billets in Tangshan was reported at 2,980 RMB/ton. The weakening of the steel billet market was mainly due to two factors: firstly, downstream demand continued to shrink. With the approaching Spring Festival, the operating rates of downstream industries using billets, such as mild steel plates and sections, were gradually decreasing, leading to a significant reduction in purchasing demand and sluggish market transactions, which put significant downward pressure on steel billet prices; secondly, the market trading atmosphere was weak. As the Spring Festival approaching, traders and downstream enterprises were gradually leaving the market for the holiday, significantly reducing market participation. The circulation of steel billets slowed down, and prices lacked upward momentum.

Supply and Demand

Last week, the market for mild steel plates was in a relatively balanced state of supply and demand, with inventory showing slight fluctuations and overall pressure remaining manageable. As of January 16th, the weekly production of mild steel plates was 1.5839 million tons, and the apparent consumption was 1.5815 million tons, indicating a basic balance between supply and demand. The total national inventory of mild steel plates was 1.9636 million tons, including 827,000 tons in mill inventories and 1.1366 million tons in social inventories, both showing slight fluctuations compared to the previous week, with no significant accumulation or depletion of inventory. The core reason for the changes in inventory structure is that, on the one hand, last week's production and consumption were basically matched, with the balance of supply and demand supporting stable inventory levels; on the other hand, as the Spring Festival approaching, traders' willingness to stock up was weak, resulting in limited replenishment of social inventories, while a slight increase in demand in some regions alleviated the pressure of inventory accumulation.

Market outlook

As the Spring Festival approaching, demand further contracted, and downward pressure will gradually become apparent. Negative factors include: firstly, the seasonal off-season effect before the Spring Festival will become more pronounced, with downstream end-users gradually entering a semi-closed state before the holiday; secondly, inventory pressure is gradually accumulating, with a slight increase in mild steel plate inventory this week, and this pressure will intensify as demand further contracts; thirdly, raw material price support is weakening, with recent fluctuations and weakening prices of raw materials such as steel billets and coking coal, reducing cost support for mild steel plates. Positive factors include: firstly, overall inventory pressure is currently manageable, and there is no large-scale accumulation; secondly, demand for some high-end varieties remains strong, with continuous orders from industries such as shipbuilding and wind power ensuring the stability of high-end mild steel plate prices; thirdly, expectations of policy support remain, with government subsidies being released in many regions, which is expected to boost overall economic sentiment. Overall, negative factors will slightly outweigh positive factors in the mild steel plate market next week, but positive factors will limit the decline, and the market is likely to maintain a narrow range of fluctuations, with prices unlikely to experience significant changes.

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