Price trend

As of the 24th, the average price of domestic hot rolled coil market was 3,844 RMB/ton, down 1.74% on a weekly basis; The average price of cold rolled sheet market was 4,413.33 RMB/ton, up 1.19% on a weekly basis. This week, the price of the plate market was weak and volatile, and the demand side was limited due to the epidemic. In addition, the news of the Federal Reserve's interest rate increase continued to negative the commodity market, so the market was pessimistic.

Analysis review

Profit

The gross profit of hot rolled coils rose by 51 RMB/ton, and the gross profit margin rose to -1.99%; The gross profit of cold-rolled sheet rose by 120 RMB/ton, and the gross profit margin rose to -6.79%.

Inventory

According to the latest data learned by SunSirs, the social inventory of hot rolled coils this week was 2.547 million tons, down 41,600 tons from last week, and the weekly output was 3.1549 million tons, an increase of 25,600 tons on a weekly basis; The social inventory of cold-rolled sheet this week was 1.308 million tons, a decrease of 24,900 tons compared with last week, and the weekly output was 829,300 tons, an increase of 10,700 tons on a weekly basis.

From the data, this week's output and supply increased on a month on month basis, among which the resumption of short process steel plants was more obvious. It is understood that the operating rate of short process electric arc furnace steelmaking plants remained between 49% and 53%, up about 7% from the pre festival level. The main reason is that the price of raw material scrap fell, the profits of the electric arc furnace steel plant eased slightly, and the steel plant resumed production in succession, which led to the change of the steel plant inventory from destocking to accumulation.

Raw materials

The coke market price continued to maintain a temporary stable operation this week, with the price of quasi primary metallurgical coke at 2,600 RMB/ton. Due to the difficulty of raw material transportation in some areas, the production of blast furnaces in steel plants was reduced. The price of coking coal continues to rise without enough power, and the coke market is expected to operate stably in the short term.

Iron ore prices fell in shock this week and rebounded slightly near Friday. The profits of steel mills had shrunk a lot, and the enthusiasm of manufacturers was limited. In addition to the production restriction in the northern region, the shipment and arrival of iron ores rebounded. It is expected that iron ore will maintain strong supply and weak demand fundamentals next week, and iron ore is easy to fall but difficult to rise.

Market outlook

As the traditional peak demand season is gradually approaching the end, steel consumption has not shown significant incremental performance. In addition, the coke and iron ore market expectations are weak, cost support is gradually weakened, and market confidence is hit. At present, the output of steel plants is rising. In the case of sluggish demand and loss of profits, it is not ruled out that steel plants will take the initiative to reduce production again, and the relationship between supply and demand is further weakened. It is expected that the prices of hot rolled coil and cold rolled sheet will be weak and stable in the short term.

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