Hot and cold rolled coils Prices are short-term or dominated by small fluctuations

Since August, the hot and cold rolled coil market is still little up and down, trading cold, prices volatile downwards. Traders shipping is not smooth, limited sales, after the market generally cautious attitude. At the beginning of August, the price of hot and cold rolled coils fell sharply.

　　As of August 16, the price of hot-rolled coils on the Shanghai market fell by 140 yuan/tonne, while the price of cold-rolled coils fell by 10 yuan/tonne. Recently, Shanghai Ruikun Metal Materials Co. , Ltd. General Manager Li Zhongshuang in an interview with China Metallurgical News, said that at present, the plate market trading off-season, inventory is increasing. China and the United States trade friction has made new progress, the United States to China as a "currency manipulator", the foreign trade environment deteriorated. The RMB broke seven against the dollar and other factors, leading to the futures market down, the spot market followed suit.

　　It is expected that the price of hot and cold rolled coils will be difficult to rise in the short term, and will be dominated by small fluctuations.

　　Other factors that affect market movements still need to pay attention to and pay attention to, mainly in the following aspects: One is the change of terminal demand. From the recent hot and cold rolling coil market trading conditions, because the downstream terminal effective demand has not been significantly released, "steel demand" has been reduced, traders basically to reduce the price of shipments mainly to digest inventory. At present, as the main user of hot and cold rolling coils, the automotive industry is in poor production and marketing, purchasing power is insufficient. According to the latest data, as of July 28, the average daily retail sales of domestic passenger cars reached 35,442 units, down 16% year-on-year. However, car inventories are increasing. According to the latest China Auto Dealer Inventory Alert Index, the inventory warning index for auto dealers stood at 62.17 percent in July, up 11.8 percent month-on-month and 8.3 percent year-on-year, above the alert line. Without obvious policy stimulus in the latter part of the year, the demand situation for automobiles is expected to be difficult to improve.

　　It is expected that the demand for hot and cold rolled coils in the automotive industry will be difficult to increase. Second, the change of market supply. As the hot and cold rolled coil market continues to be weak, prices fluctuated down, "long strong plate weak" situation remains strong. On August 16th, the price of 5.5 mm hot-rolled coils on the Shanghai market was 3770 yuan/tonne, and the price of the 6.5 mm high line was 4010 yuan/tonne. It can be seen that the price of wire is higher than the hot-rolled roll price of 240 yuan / ton. The profit of steel mill production of long material is obviously better than that of production sheet, and steel enterprises still tilt the production capacity towards long material.

　　From this point of view, the late hot and cold rolled coil market supply will not increase significantly, is expected to ease the contradiction between supply and demand, support steel prices to stabilize. Third, the change of factory price policy adjustment. At present, the price of coke, iron ore and other steel raw materials is still high. Recently, the price of coke rose again 100 yuan / ton, steel production costs significantly increased, the benefits of contraction, some steel mills even loss. Through some short-process steel mills production costs, profit research found that in July not only operating dismal profit decline, some even lost about 200 yuan / ton. In this state, steel mills are willing to increase the price, generally raise the factory price policy. Therefore, whether it is the production cost of steel mills or the cost of ordering traders are rising, the spot market price of hot and cold rolled coils have a supporting force.

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