Recent market insights: cold and hot rolled sheet prices
In recent times, the prices in the cold and hot rolled sheet market have been subject to ongoing fluctuations, resulting in moderate trading conditions. Steel traders are facing a subdued market with cautious optimism for future trends. Looking back at the market performance in August, both cold and hot rolled sheet prices have seen periods of increase and decrease. As of the last trading day in August (August 31st), the price for Angang-produced 1.0mm cold-rolled sheet (ST12) stood at 4820 yuan per ton, marking an increase of 90 yuan per ton compared to the price of 4730 yuan per ton on August 1st. On the other hand, the price for Shougang and Angang-produced 5.5mm × 1500mm × C hot-rolled coil (Q235B) was 3910 yuan per ton, reflecting a decrease of 170 yuan per ton compared to the price of 4080 yuan per ton on August 1st.
It’s evident that the cold-rolled sheet market has performed notably better than the hot-rolled sheet market in recent times. During this period, downstream end-users have been relatively cautious in their procurement, primarily focusing on essential needs. Steel traders have faced challenges in smooth sales, leading to a situation where steel prices experienced periods of “visible decline and concealed reduction.”
Looking ahead, it is expected that the prices of cold and hot rolled sheets will stabilize in the short term, for several reasons:
1.Improved Demand Outlook: In the near term, there is optimism that the weak demand situation in the cold and hot rolled sheet markets will gradually improve. Manufacturing sectors such as automobiles and appliances in China have started to witness improved production and business conditions.
2.Manageable Supply Pressure: According to data released by the China Federation of Logistics and Purchasing, the Purchasing Managers’ Index (PMI) for the steel industry in August was 45.2%, representing a 4.7 percentage point decrease from the previous month. Within this, the production index was 46.10%, declining by 6.40 percentage points compared to the previous month, and the finished product inventory index was 38.30%, showing a marginal 0.10 percentage point decrease. The production and inventory indices for steel enterprises are both declining, and the social inventory of cold and hot rolled sheets is also decreasing.
3.Robust Cost Support: The driving force behind steel prices continues to be strong due to the rigidity of production costs. While there have been fluctuations in prices for iron ore, coke, and scrap steel in recent times, they have generally remained at elevated levels. As of the end of August, the price of imported Australian 61.5% iron ore at Qingdao Port in Shandong stood at 889 yuan per ton, marking an increase of 18 yuan per ton compared to the previous month. In the Jiangsu region, the price of scrap steel was 2670 yuan per ton, showing a decrease of 90 yuan per ton, while in the Shanxi region, the price of primary coke remained steady at 1900 yuan per ton. Overall, the cost platform for steel production in August showed a slight upward trend. With the strong support of cost factors, steel enterprises are likely to adjust their prices upward, which should help restrain further declines in cold and hot rolled sheet prices in the coming months.
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