Hot and cold rolled coil market this year is an obvious feature of “unusual”, mainly reflected in the sharp price shock, especially in May this year, the price rose sharply. Into November, hot and cold rolled coil market once again ushered in a turbulent market.
First, it is difficult to increase the intensity of demand. Nowadays, the car market is weak, chip shortage problem still exists, production and sales decline. Home appliances market production and sales situation is also poor. Although the real estate industry is mainly the consumption of construction steel such as rebar steel, but the weakness of the real estate market indirectly affects the consumption of home appliances market.
At the end of this period of time, real estate, automotive, household appliances and other downstream industries are difficult to improve significantly, the intensity of cold and hot rolled coil demand will only be weak will not be strong.
Second, supply will not increase significantly. At present, some steel enterprises due to local heating season environmental protection limit production and the implementation of off-peak production. Many steel enterprises in this period of time to increase production limits, production cuts, to ensure that this year’s crude steel output does not exceed last year. Li Zhongshuang expects that the end of this year to the beginning of next year this period of time, crude steel production will continue to decline, the market supply will not increase will only decrease.
Third, the production cost of hot and cold rolled coil plate is expected to decrease. Recently, the prices of iron ore, coke, scrap and other raw steel fuels have been falling, and the price of imported iron ore has fallen by more than 60%. Iron ore prices still have some room to fall in the future. In addition, statistics show that in the last week of November, scrap steel prices also fell more than 10 percent.
Iron and steel raw fuel prices fall, resulting in steel enterprises production cost center of gravity downward, rigid cost support steel price rise of the power weakened. Affected by this, steel enterprises generally adjust steel factory prices, the basic to reduce the main. This is also leading to this period of hot and cold rolled coil market price shock down one of the reasons.