SunSirs: Inventory Pressure Constrains the Weakening Trend of Galvanized Sheets Prices

Driven by favorable macroeconomic policies, this week's hot-rolled coil futures market is strong, market sentiment has improved, downstream end-users' purchasing enthusiasm has increased, stocking demand has been gradually released, and the transaction atmosphere of the galvanized coil market has warmed up. In the short term, traders generally hold a bullish attitude, and the quotations are relatively strong, but the transaction of high-priced resources is still cautious.

According to the commodity market analysis system of SunSirs, the prices of galvanized coils in China have fluctuated this week.

As of May 16, the average market price of galvanized coils in China was 4245.00 RMB/ton, down 0.29% from the beginning of last week.

Fundamentals: This week's futures market rose, and the shipment performance of merchants in the galvanized coil market was acceptable.

According to the latest data obtained by SunSirs, the overall operating rate of galvanized sheets this week was 81.63%; the capacity utilization rate was 64.18%, up 0.17% from last week; the weekly output last week was 915,400 tons, an increase of 2,400 tons from the previous week.

The United States adjusted the tariffs imposed on China, and short-term export orders may recover. The willingness of downstream terminals to accept orders and prepare stocks has increased, and the market pessimism has eased. As of May 9, the inventory of steel mills across the country was 477,700 tons, down 10,100 tons from last week; the social inventory was 1.1124 million tons, up 0.2% from the previous week; the total inventory was 1.5902 million tons, down 8,100 tons from the previous week.

This week, Anshan Iron and Steel and Benxi Iron and Steel issued their ordering policies for June, among which the ordering price of galvanized sheet and galvanized coil was reduced by 50 RMB/ton from the previous period. Most of the merchants in the market are cautious and wait-and-see about the future market.

Forecast for the future market: On the whole, affected by futures fluctuations and weak demand, as well as the constraints of superimposed inventory pressure, the supply and demand relationship is still the dominant adjustment factor. SunSirs expects that the price of galvanized sheet and galvanized coil may continue to fluctuate in a narrow range in the short term.

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