Li Zhongshuang: Recently, the supply and demand pattern of cold and hot rolled sheets has improved.
Entering November, the domestic cold and hot rolled sheet market shows no significant improvement, operating overall weakly with a lack of market transactions.Hot rolledand cold rolled sheet supply and demand patterns have improved recently after a period of decline. On November 15, Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd., stated in an interview with China Metallurgical News that the prices of cold and hot rolled sheets are expected to fluctuate upwards.Sheet pricesare expected to rise.
Li Zhongshuang introduced that in early November, the price of hot rolled sheets in the Shanghai market fell by 20 yuan/ton,while cold rolledsheet prices remained relatively stable. From the trading situation, the recent trading atmosphere in the cold and hot rolled sheet market is average, with downstream end users mainly purchasing based on rigid demand.
Regarding the future trends of the cold and hot rolled sheet market, Li Zhongshuang expects that in the short term, the prices of cold and hot rolled sheets will stop falling and stabilize, fluctuating upwards, mainly for the following reasons.
First, the demand for cold and hot rolled sheets remains resilient. Recently, the production and sales conditions in manufacturing industries such as automobiles and home appliances are still acceptable. Data from the Passenger Car Market Information Joint Conference shows that in October, the retail volume of China's passenger car market reached 2.361 million units, a year-on-year increase of 16% and a month-on-month increase of 12%; in the first ten months of this year, the cumulative retail volume reached 17.936 million units, a year-on-year increase of 4%. In terms of exports, data from the General Administration of Customs shows that in October, China exported 585,000 vehicles. In the first ten months of this year, China exported a total of 5.285 million vehicles, a year-on-year increase of 24.8%.
Li Zhongshuang analyzed that as November arrives, the "Double Eleven" promotional activities combined with the accelerated implementation of the old-for-new policy will continue to boost consumption in the automobile and home appliance markets, likely driving growth in production and sales of automobiles and home appliances. As a result, the demand for cold and hot rolled sheets is expected to increase, thereby supporting the upward trend in prices.
Second, the supply pressure of cold and hot rolled sheets is not significant. Entering October, the prices of domestic cold and hot rolled sheets were generally in a fluctuating downward channel, with steel companies' profits significantly shrinking, some even suffering severe losses, leading many steel companies to actively control production, resulting in weak enthusiasm for capacity release. Data from the China Iron and Steel Industry Association shows that in early November, the average daily crude steel output of key statistical steel companies reached 2.096 million tons, a slight increase of only 0.1% compared to the previous ten days;Pig ironaverage daily output reached 1.882 million tons, a decrease of 0.1% compared to the previous ten days; the average daily output of steel reached 1.953 million tons, a decrease of 7.8% compared to the previous ten days. In terms of inventory, in early November, the social inventory of five major steel varieties in 21 cities nationwide was 6.93 million tons, a decrease of 70,000 tons compared to the previous ten days, down 1.0%.
"Currently, steel traders do not have abundant spot resources, and the sales pressure is not significant. The situation of strong supply and weak demand in the cold and hot rolled sheet market has improved, coupled with the strong willingness of steel companies to maintain prices, which has to some extent curbed the decline in cold and hot rolled sheet prices," Li Zhongshuang stated.
Third, the rigid cost support remains strong. Recently,iron ore, coke, , and scrap steeland other raw materials for steel have experienced high-level fluctuations. Specifically,iron ore priceshave slightly increased,scrap steel priceshave fluctuated,and coke priceshave remained stable. The production cost support for steel companies remains strong, therefore, when determining the ex-factory prices of steel, the focus is on maintaining prices, which is also beneficial for the gradual stabilization of cold and hot rolled sheet prices in the future.
