Price trend

On December 9, the price of hot coil rose slightly, with an increase of 20-50 RMB. The increase of hot coil price is mainly due to the sharp rise of iron ore futures and the low market resource inventory in the short term.

As of the close of the 9th, futures HRC prices closed at 3,677, up 58, or 1.6%; iron ore prices closed at 653, up 34.5, or 5.58%. In the morning, the iron ore price rose sharply along the way, leading to the rise of HRC futures prices. On 9th, Tangshan's billet price was reduced by 10 RMB, and the quoted price was 3,440 RMB/ton. The support of raw material costs has weakened. Recently, steel prices have risen, steel mill profits have rebounded, manufacturers' enthusiasm for production has increased, and their willingness to price is strong. The price went up, and the merchants also raised the price to test the market acceptance.

According to relevant data, the national HRC inventory was 175.2 last week (2019.11.29-12.5, the same below), a week-on-month decrease of 4.21, and a year-on-year decrease of 22.6. Although the downstream market demand has gradually weakened due to the market's transition to the off-season, purchases have been replenished as needed. However, market resources are still low in the short term, and merchants have a strong mood for merchandise. The wait-and-see mentality prevails, with low-price transactions predominant, and the overall situation is average.

In summary, there is evidence of weakening of HRC cost-end support. Due to the low level of resource inventory in the short term, stimulated by futures prices, merchants have pulled up to test the market. In the short term, HRC prices may remain stable, but the trend of declining prices is irreversible. Downstream demand is gradually decreasing, and HRC prices are likely to decline.

If you have any questions, please feel free to contact SunSirs with marketing@sunsirs.com.