1. Price quotation of Mild steel plate in 2019
According to statistics, Mild steel plate (material: Q235B; Market prices rose in the first half of 2019, but continued to decline since August. The average price at the beginning of the year is $527.92/ton. As of today (December 26), the average price was $526.06 /ton, down 0.35% for the year. Before May 2019, both supply and demand in the market were booming. Considering the strength of cost support, market prices kept rising. After May, the market demand is weak, spot prices fall sharply, and steel mills began to show losses, not high enthusiasm for production. After July, the market gradually changed into a situation of weak supply and demand, spot price weakness downward, decline gradually narrowed. Overall, the price of domestic plate after half a year is depressed. After entering December, off-season effect gradually appeared, the performance of the demand side will be weaker. But the steel mill profit is considerable, capacity utilization rate large probability recovery; the pressure on the supply side will not reduce. In addition, the price difference between north and south is obvious at present. With the recovery of the shipping capacity of northern ports, the amount of resources from north to south will increase significantly. So oversupply will be the main tone of the market in December.
2. Production and capacity utilization of Mild steel plate
According to the data, the total capacity of Chinese mild steel plate in 2018 was 60.163 million tons. By the end of November, the total capacity of Chinese Mild steel plate in 2019 was 57.858 million tons, an increase of 4.59 percent compared with the total capacity of 5531.8 tons at the end of November 2018. In early 2018, due to the impact of environmental restrictions, steel production remained low. After April 2018, steel mill output gradually increased. At the end of the year, the output decreased slightly as the profit situation became worse and the effect of production limit was added. In 2019, from January to June, due to the decline in the profits of tons of steel mills, in order to pursue economies of scale, increase absolute returns with scale, and release supply at a continuously high level. In July 2019, some regional steel mills were repaired successively, and steel mills in Hebei Handan were closed down, leading to a slight decline in the utilization rate of steel mills' capacity. To sum up, in 2019, with the continuous improvement of the environmental protection technology of steel mills, the emission level will gradually reach the standard, and the number of affected steel mills will continuously decrease, with the degree of impact also decreasing, and the supply will increase slightly compared with last year.
3. Export volume of Mild steel plate
In 2018, the average monthly export volume of mild steel plate was 329,800 tons. By the end of November 2019, the average monthly export volume of mild steel plate was 335,800 tons, up 1.82% from the same period last year. Overall, this year's plate exports better than last year.
4. Social inventory of Mild steel plate
From the perspective of changes in social inventory, new changes have also taken place in 2019. The average stock of mild steel plate was 1.0645 million tons in 2019 and 1.1092 million tons in 2018, a year-on-year decrease of 4.03%. In the first quarter of 2019, the impaction of mild steel plate market reservoir was amplified, mainly due to the slight increase in steel mill output this year, the accelerated transfer of inventory, and the market's passive accumulation. In the second and third quarters, social inventory was basically the same as last year, but from the fourth quarter, social inventory decreased significantly compared with the same period last year. The biggest reason is that in October steel mills have resumed work, the market supply pressure has been magnified. However, in some regions, demand is gradually weakening and terminal purchase volume is lower than that in September, leading to a slower decline in market inventory. Moreover, the production capacity of regional steel mills has not been fully released. Under the influence of the mismatch between supply and demand, the inventory has finally dropped significantly.
5.2020 prospect of mild steel plate industry
- Supply: It will not have new production capacity of mid-thickness plate in 2020. However, mild steel plate production enterprises for the long process, and next year, thread, hot coil and other new production capacity is more, and inter-variety production transfer has strong uncertainty. Mill capacity utilization continued to be low in the second half of this year, so there is still room for further increases in supply next year.
- Demand: It is expected that the shipbuilding industry will continue to be affected by the weakening of new orders and hand-held orders next year, so the demand for steel is not optimistic. Steel structure industry increment is limited; construction machinery industry pressure is not big. Taken together, overall demand is slightly higher than in 2019.
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