After January of this year, the price of hot and cold rolled coil fell slightly, trading of stainless steel coil market remain depressed, shipment is not smooth, and traders feel cautious towards the future market. On 14th January, Mr.Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd, was interviewed by China Metallurgical News. He said that in the short term, the market price of hot and cold rolled coil is unlikely to rebound significantly and is expected to fluctuate slightly.
Li said, “During this period, considering the profits, steel buyers are not willing to place the order. Most of them choose to bargain with the seller, trying to use the quantity to win more better price. Regarding the late trend of hot and cold rolled coil market, it will not improve too much in short term.”
At the same time, Li also advises market participants to pay attention to the following factors affecting the market trend:
One is the downstream demand changes. At the beginning of the New Year, the production and sales of downstream industries with large plate consumption such as automobiles and home appliances are considerable, and the demand for cold and hot rolled coil is still strong, which curbed the decline of hot and cold rolled coil market price. According to unknown resource, the price of 5500 to 5600RMB/ton is acceptable for current downstream users.
Second one is market supply change. At present, the inventory growth trend of hot and cold rolled coil is not obvious, and traders didn’t have enough off-shelf products, even some popular products are out of stock. However, before Chinese New Year, steel manufacturer will enter the maintenance period, which will reduce the steel production. For example, some steel companies will maintain electric furnace from January 28 to February 6, which may lead to the reduction of 25,000 tons steel production; Some will do a 33-day overhaul for a 3,200 cubic meter blast furnace in January, which is expected to affect an average daily output of about 0.7500 tons of molten iron. The maintenance period will cause some impacts on market supply.
Third one is production cost change of steel enterprises. Recently, the price of iron ore, scrap steel, coke and other steel raw fuel prices continue to climb. To ease the cost pressure, steel enterprises chose to increase the price of steel. Few days ago, some large steel enterprises offer EXW price in February. Some steel enterprises increased the hot rolled coil plate base price by 350RMB/ton, and some of them increased by 400RMB/ton. With the support of rigid cost, steel enterprises significantly increased EXW price, which in a way contained the later decline of market price.
Fourth one is the epidemic situation change in some areas in China. Currently, with dozens of new confirmed cases being reported every day, the epidemic situation in Hebei Province remains severe. And more new confirmed cases in Heilongjiang and Shaanxi provinces are reported. Influenced by Covid-19, the transportation of Hebei steel enterprises was affected. Li said, if the epidemic cannot be effectively controlled in the short term, it will lead to regional stainless steel coil market volatility.