Analysis of the future market of hot and cold rolled coils

Since entering June, the domestic cold and hot rolled coil market has not improved significantly. The market transaction is generally sluggish, and the prices of cold and hot rolled coils are fluctuating. Traders are generally cautious and optimistic about the future market.

Current price trend

Hot rolled coil

Hot rolled coil

Hot rolled coil (HRC):

In early June, the price of hot rolled coils in the Shanghai market fell by 10 yuan/ton, and the market demand was general.

Cold rolled coil

Cold rolled coil

Cold rolled coil (CRC):

During the same period, the price of cold rolled coils in the Shanghai market also fell by 10 yuan/ton, and the supply was sufficient.

Market sentiment

Trade dynamics:

The overall transaction is sluggish, and downstream end users are more cautious in purchasing, basically purchasing on demand.

In order to ship goods, some merchants choose to accept customer bargaining, resulting in loosening of steel transaction prices, and the phenomenon of “open drop + hidden drop” in steel prices is relatively common.

Looking at the future market outlook, some industry insiders believe that the future market

Hot rolled coil:

Market prices will stabilize.

Cold rolled coil:

Prices will consolidate weakly.

Influencing factors

Weak terminal demand:

Automobile and home appliance industries:

From May 1 to May 26, China’s passenger car retail sales reached 1.208 million units, down 6% year-on-year and 2% month-on-month.

In early June, China’s passenger car retail sales reached 360,000 units, down 8% year-on-year and 23% month-on-month.

Online retail sales of home appliances in May:

Refrigerators: down 14.4%

Freezers: down 15.8%

Washing machines: down 12.4%

Air conditioners: down 37%

Offline retail sales:

Refrigerators: up 10.1%

Washing machines: up 12.9%

Freezers: down 9.1%

Air conditioners: down 1.3%

Market supply level:

Steel production:

In early June, the average daily crude steel output of key enterprises reached 2.2483 million tons, up 3.3% month-on-month and 0.77% year-on-year.

Steel inventory:

In early June, the steel inventory of key enterprises was about 16.0862 million tons, a month-on-month increase of 1.5194 million tons (+10.43%).

Cost factors:

Raw material prices:

June 10-June 16:

Coking coal prices fell by 50-70 yuan/ton.

The second round of coke price cuts, down 50-55 yuan/ton.

Scrap steel prices fell by 20-50 yuan/ton.

Imported iron ore prices fell, with Qingdao Port’s 61.5% PB powder quoted at 818 yuan/ton, down 21 yuan/ton.

In the short term, the market price of hot-rolled coil is expected to stabilize, while the price of cold-rolled coil may continue to consolidate weakly. The overall market is affected by weak demand, increased supply and fluctuations in raw material costs in major industries, reflecting the current market sentiment and expectations of industry insiders.