Price trend

As of the 19th, the average price of domestic hot coil market was 3,930 RMB/ton, down 0.51% from the previous week; the average price of cold rolled market was 4,393.33 RMB/ton, up 0.46% from the previous week. The price of coils fluctuated and fell. After the holiday, the expectation that the Fed would raise interest rates by 75 basis points rose sharply. Domestic commodity futures fell across the board. Market confidence was low, and merchants generally lowered their quotations. Subsequently, the country released a number of macro data, and the futures market turned red, but the real estate industry was still undervalued at a stage, and the price of coils was stable and weak.

Analysis review

Profit side

The gross profit of hot-rolled coils decreased by 42 RMB/ton, and the gross profit rate decreased to -1.68%; the gross profit of cold-rolled sheets decreased by 29 RMB/ton, and the gross profit rate decreased to -10.99%.

Inventory aspects

According to the latest data from SunSirs, the hot-rolled social inventory this week was 2.4163 million tons, an increase of 15,900 tons from last week, and the weekly output was 3.0916 million tons, an increase of 19,100 tons from the previous week; the cold-rolled social inventory this week was 1.3381 million tons, compared with last week, it decreased by 8,500 tons, and the weekly output was 791,900 tons, an increase of 2,800 tons from the previous week. Judging from the data, this week, the hot-rolled inventory changed from a decline to an increase, and the apparent demand consumption also declined, and the supply side continued to maintain a high level.

Raw materials

From the perspective of futures, the main coking coal futures contract rebounded from a low point, struggling to support the spot price of steel. From the spot point of view, the price of raw coking coal is expected to rise, and the cost side has certain support for coking enterprises. Coking enterprises and steel mills are deadlocked, the second round of promotion and reduction has not been implemented, and coke prices fluctuate within a narrow range.

The small amount of iron ore to the port and the resumption of production of the steel mills on the demand side have boosted the iron ore to fluctuate sideways. Although the stock of raw iron ore is not much, the steel mills are still mainly replenishing the stock just in need.

Market outlook

Raw material prices are high, and profit pressure is increasing. Coupled with the gradual resumption of production and increased production in various places, the short-term supply of the steel market has increased, but the demand for steel continues to be sluggish, resulting in an increase in the market in the peak season. In the short term, the dilemma of the sheet and coil market is difficult to crack.

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