Since April, the domestic steel market has shown a significant recovery. With the strong trend of raw iron ore prices, the prices of finished steel markets have almost all recovered. As the slow-selling product of the steel market-galvanized, its price finally appeared to stop falling, but the upward trend has been missing. The main reason is that its market inventory consumption pressure is still relatively large, and the procurement demand is gradually rising but weak, which makes it difficult to increase its price.
According to SunSirs price monitoring, as of April 20, the average market price of 1.0 * 1250 * C hot-dip galvanized coil in Shanghai was 4,210 yuan / ton, down 9.97% from the beginning of February, down 1.41% from the beginning of April, and down 11.14% year-on-year. Compared with the straight-line decline in February and March, the weak and volatile trend in April has reflected the obvious improvement in the galvanized market. Among them, the resources of Benxi Iron & Steel and Handan Iron & Steel are 4130-4160 yuan / ton, Wuhan Iron & Steel 4350-4400 yuan / ton, Hanbao 4110-4130 yuan / ton, Shougang 4220-4240 yuan / ton, Anshan Steel 4290-4300 yuan / ton. Overall, the market price gap has narrowed, and the general trend is relatively stable.
Supply, the data shows that as of April 17, 56 out of 130 266 galvanizing production lines in the country have been overhauled, maintaining their current level for basically two consecutive months. The resumption of work is good, but compared with previous years, there is still a gap of nearly 8% in the operating rate. The data shows that the steel mill operating rate has remained between 75% and 80% for 6 consecutive weeks, and the operating level is relatively weak. And in April it was basically around 80%, but the year-on-year decline was nearly 10%. The capacity utilization rate is in the range of 60% -65%, and the weekly output of steel mills is also in the range of 720,000-800,000 tons. The two have basically returned to normal market levels, and the year-on-year declines are about 3% and 50,000 tons respectively. Therefore, on the supply side, although the operating rate still has room to increase, the capacity utilization rate and output are basically stable, which shows that the steel mills have slightly reduced their enthusiasm for production under the current low price environment. Slightly down.
In terms of inventory, the data shows that as of April 17, the galvanized social inventory amounted to 1.341 million tons, ending the 10 consecutive rise market. However, the year-on-year increase is still one-third, and the market destocking pressure is still greater. However, the inventory of steel mills is 670,700 tons, a new low level in two months, which shows that the inventory has moved backwards, and the pressure of the steel mills has successfully passed on to the market. Agreement households and contract households may be cleared or have a possibility of lowering prices.
From the perspective of the galvanizing industry chain, from the beginning of April to the present, the prices of raw material hot-rolled coils and zinc metal have both risen, but it is difficult to drive the downstream galvanizing and color coating market prices to rise, only to stop their prices. It is mainly because the use time of galvanized products for real estate is in the middle and late stages of the project, so the real estate is resumed but the demand has not started. Galvanizing for home appliances is still weak due to the weakness of the downstream home appliance market and the purchasing power is still insufficient. The galvanizing of automobiles is due to the global public health event and the large-scale suspension of production caused a sharp decline in demand. Finally, due to market cost issues, galvanized processed products used in other manufacturing industries have experienced short-term price reductions, which have limited market price increases. Therefore, even if the raw material rises more than 100 yuan, it is difficult to promote the price of galvanizing.
The spot weekly K line has basically bottomed out, and the current Chinese market economy is recovering well. The steel market is gradually normal. It is expected that domestic demand may improve, which will promote the price rebound.
In summary, SunSirs galvanizing analysts believe that although the current "supply oversupply" situation in the galvanizing market has not changed, it has eased. Although the inventory pressure remains, the rate of demand consumption is picking up, and due to the high cost and low market prices, the production pressure of the galvanizing plant has increased, and there may be plans to continue to reduce production in the later period. Therefore, under the environment of "increasing supply, reducing demand", galvanizing prices are expected to stop falling and rebound. It is also worth noting that although mainstream steel mills' May futures prices have generally been reduced by nearly 150 yuan / ton, according to the previous market, their falling prices are barely flat with the market, so their expectations also show that steel mills make up for traders , Reducing the losses caused by the market. Therefore, it is expected that there will be a rebound in late April, but its decline may basically stagnate. Although May and June were the market for the off-season effect of the steel market, the market's expected concentration of demand was also released during this period. Comprehensive evaluation of the market average price is expected to be 4250-4350 yuan / ton.
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