SunSirs: With Supply Exceeding Demand, the Price of Galvanized Steel Sheets and Coils Was Trending Downwards

Price trend

Last week, hot-rolled coil futures fluctuated downwards, leading to a slight decrease in mainstream spot prices of galvanized steel sheets and coils, and the overall market trading atmosphere was weak. According to SunSirs' commodity market analysis system, as of January 23rd, the average price of galvanized steel sheets and coils in the domestic market was 4,050.00 RMB/ton, a slight decrease of 0.12% compared to the beginning of the week.

Market analysis

Fundamentals: According to market traders, as the Spring Festival approaching, some downstream factories successively suspended production and gone on holiday due to insufficient orders, and terminal demand had officially entered a seasonal contraction phase. Affected by this, market transactions continued to shrink, and downstream purchases were generally based on immediate needs. However, steel production remained relatively high, and supply pressure has not decreased accordingly, resulting in an overall market pattern of strong supply and weak demand.

According to the latest data obtained by SunSirs, the overall operating rate of galvanized steel sheets and coils last week was 78.91%; the capacity utilization rate was 64.5%, a decrease of 0.78% compared to the previous week; the weekly output was 920,000 tons, a decrease of 11,100 tons compared to the previous week; and the steel mill inventory was 486,200 tons, a decrease of 5,600 tons compared to the previous week.

Regarding costs, major steel mills in the Shanghai area had released their settlement policies, with the settlement price for galvanized steel sheets and coils at 4,050 RMB/ton, which was significantly lower than the selling prices offered by market traders.

Regarding market sentiment, due to persistently weak demand, market participants remained cautious about the post-holiday market, and their willingness to stockpile during the winter was relatively low.

Market outlook

The overall market was characterized by strong supply and weak demand. As the year-end approaching, traders were cautious about purchasing, and end-users were adopting a wait-and-see attitude. SunSirs predicts that galvanized steel sheet and coil prices may trend downwards in the short term.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.