SunSirs: Market Spread Tangshan Production Restrictions, Leading to an Increase in the Market for Mild Steel Plates

Price trend

At the beginning of the week, most parts of the country continued to be hot, some areas were warned of rainstorm, end users purchased as needed, market transactions were relatively flat, and spot prices were mainly stable. Starting from the middle of the week, the market spread the Tangshan production restriction and favorable policies, and the futures market strengthened, boosting market confidence and leading to slight price increases in various regions. According to the Commodity Market Analysis System of SunSirs, General mid steel plate (material: Q235B; Specification: On July 4th, the price was 3,252 RMB/ton, an increase of 1.25% from Monday.

Influence factor

Steel billet market: 

Domestic steel billet prices remained stable with a slight increase last week. As of July 4th, the tax inclusive price of Tangshan ordinary square billets was quoted at 2,930 RMB/ton, an increase of 10 RMB/ton compared to the last week’s previous week. In terms of inventory, Tangshan's main warehouse inventory was 680,400 tons, an increase of 83,800 tons from last week. The current steel billet market trading was flat, downstream demand remained low, and billet manufacturers mainly chose to ship, with little change in steel billet prices. Based on the strengthening of raw material prices and increased cost support, but with an increase in demand and inventory during the off-season, it is expected that the domestic steel billet market will experience a narrow range of fluctuations and stronger adjustments next week.

Supply and demand:

Last week, most of the country was hot, and rainstorm warning was given in some areas. The terminal outdoor construction was affected, and the purchase demand remained low. In the first half of the week, the transaction performance was light. In the second half of the week, due to the rise of steel prices, the speculative demand increased, and spot transactions increased slightly.

Market outlook

On the whole, the demand was limited due to high-temperature rainstorm, and the demand characteristics were obvious in the off-season. The supply of molten iron was reduced month on month, the social resources were at a low level, most businesses were not complete in specifications, and the market sales pressure was not great. At the same time, under the policy of "anti involution and capacity reduction", the market focused on eliminating outdated production capacity, coupled with Tangshan's environmental protection production restrictions and sintering machine production restrictions of 30%, there was a strong expectation of production reduction in the market. Based on the difficulty in improving demand during the off-season, the increase in raw material costs, the expectation of supply side regulation, and the formation of a game of emotional recovery, it is expected that the domestic mild steel plate market will continue to operate strongly next week.

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