Hot and cold rolled coil prices will rise steadily in the short term

Hot and cold rolled coil prices will rise steadily in the short term

Since the beginning of November, the market for hot and cold rolled coils has improved, prices have risen steadily, and the sales situation of traders is still acceptable. They are cautiously optimistic about the market outlook. Recently, Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd., said in an interview with the reporter of "China Metallurgical News" that the market price of hot and cold rolled coils is expected to rise steadily in the short term.
 
Last week (November 18 to November 22), the prices of HRC market rebounded as a whole. The price of HRC ( SPHC steel coil) in Shanghai market increased by 90 yuan / ton, and the price of thick coil Q235B steel increased by 130 yuan / ton. As the current market effect of the steel market becomes more apparent, driven by the strong rise in the rebar market price, the market price of hot rolled coils follows the futures price and is expected to rise steadily in the short term. In the same week, the price of cold-rolled coils in the Shanghai market increased by 20 yuan / ton. The price of cold-rolled coils was higher than the price of hot-rolled coils. The profits of steel mills in producing cold-rolled coils were good, making steel mills' production resources favor cold-rolled coils and hot roll plates.
 
At the same time, Li Zhongshuang suggested that market participants need to pay attention to several uncertain factors affecting the market:
First, the market supply of hot and cold rolled coils in the later period may decrease slightly. Recently, the phenomenon of oversupply in the hot and cold rolled coil market has improved. This is due to the impact of factors such as environmental protection, limiting production, and reducing production and maintenance. Recently, Shandong Province issued the “Notice on Organizing and Implementing Differentiated Peak-to-Winter Production in the Key Industries in 2019-2020”, clarifying that the implementation time of peak-to-peak production is in principle from November 15, 2019 to March 15, 2020. In addition, at the end of the year, the number of overhauls at steel mills increased. According to incomplete statistics, 19 steel mills have entered the maintenance period in November. Statistics show that as of the end of December 2019, Tianjin will shut down one 588 cubic meter blast furnace; Hebei Province will reduce its steel production capacity by 14 million tons and coke production capacity by 3 million tons; Shanxi Province will reduce steel production capacity by 1.75 million tons 10 million tons of coke production capacity will be shut down; Shandong Province will reduce coking capacity by 10.31 million tons. The combination of the above factors will curb the release of steel production capacity.
 
Second, the downturn in the automotive and home appliance industries, and the demand for hot and cold rolled coils will weaken in the later period. Production and sales in the automotive industry continued to decline. According to the data of China Association of Automobile Manufacturers, in October, the production and sales of passenger cars in China completed 1.938 million and 1.928 million, respectively, a decrease of 3.2% and 5.8% year-on-year. The production and sales volume were 95,000 and 75,000 respectively, a year-on-year decrease of 35.4% and 45.6%, and the decrease was expanded for three consecutive months. In addition, the production and sales situation of the home appliance industry is also not good. The production and sales of home appliances such as washing machines and refrigerators have shown a downward trend year-on-year.
 
Third, the ex-factory price increase of steel mills. A few days ago, a number of steel mills introduced new steel ex-factory price policies. Among them, the ex-factory prices of hot and cold rolled coils were mostly adjusted upwards, which increased the purchase costs of traders and supported the steady and rising price of cold and hot rolled coils in the market.