SunSirs: Hot and Cold Rolled Coil and Sheet Market: Costs Rise, Inventory Is Low, and Replenishes Inventory This Week (August 18-22)

Price trend

Hot rolled coil and sheet prices fall slightly this week. According to the SunSirs commodity market analysis system, as of August 22, the average domestic hot rolled coil and sheet market price was 3,406 RMB/ton, a 1.27% week-on-week decrease; the average domestic cold rolled sheet market price was 4,040 RMB/ton, a 6.31% week-on-week increase.

Factors influencing price fluctuations:

Fundamentals

According to the latest data obtained by SunSirs, the social inventory of hot rolled steel this week is 282.55 tons, up 50,600 tons from the previous week, and the weekly output is 3.2524 million tons, up 96,500 tons from the previous week; the social inventory of cold rolled steel this week is 1.3304 million tons, up 9,900 tons from the previous week, and the weekly output is 861,900 tons, up 1,400 tons from the previous week.

This week, inventories of similar-caliber steel billets at major Tangshan warehouses and ports totals 1.2344 million tons, a decrease of 32,500 tons from the previous week. Data from the General Administration of Customs showed that domestic steel billet exports totaled 1.5798 million tons in July, a 34.37% increase from the previous month and a 349.07% year-on-year increase. From January to July, steel billet exports totaled 7.472 million tons, a 309.72% year-on-year increase.

Cost side

According to Mysteel statistics, mill inventories of rebar shows an accumulation this week, increasing by 40,600 tons month-over-month. Regionally, with the exception of North China, where inventories see a slight decrease, inventories in all other regions shows a slight accumulation. Sichuan, Hubei, and Xinjiang see the largest increases in inventories among provinces. For wire rod coil, mill inventories see a slight increase this week, totaling 36,500 tons. Regionally, inventories in East China, North China, and South China see the largest increases, with increases of 15,600, 17,700, and 13,800 tons, respectively. Mill inventories in other regions fluctuates slightly to varying degrees. Guangdong sees the largest increase in inventories, with a weekly increase of 16,800 tons. For hot rolled coil, mill inventories see a slight increase, primarily in East China and Central and South China. Market prices remains largely volatile this week, with weak downstream demand and limited supply. Consequently, production and mill inventories see minimal changes.

Market outlook

Looking at the three major regions, hot rolled coil (HCR) sees a weekly destocking of 29,300 tons in northern China, 4,000 tons in eastern China, and 12,700 tons in southern China. Looking at the seven major regions, all but eastern, central, and southern China see destocking. Overall, while steel fundamentals continue to struggle, cost support remains, and steel prices are expected to fluctuate in the short term.

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