June Steel Coil Prices and Trends

Market Analysis: June Steel Coil Prices and Trends

Slow Market Transactions

In June, the domestic cold-rolled and hot-rolled coil markets saw little improvement, with sluggish transactions. Li Zhongshuang, general manager of Metal Materials Co., Ltd., discussed the situation in an interview with China Metallurgical News, noting that most traders are currently cautious about the market’s future.

Price Fluctuations in Early June

Li Zhongshuang reported that in early June, the price of hot-rolled Q235B in Shanghai fell by 70 yuan/ton, and hot-rolled SPHC dropped by 100 yuan/ton. He expects hot-rolled coil prices to stabilize soon. During the same period, cold-rolled coil prices in Shanghai decreased by 30 yuan/ton. With an abundant supply, cold-rolled products are likely to consolidate in the short term.

Demand Analysis

From the demand perspective, downstream industries have shown improvement. In June, the home appliance manufacturing industry experienced double-digit growth. Total output of air conditioners, refrigerators, and washing machines reached 35.57 million units, a 13.2% peningkatan tahun ke tahun. Domestic sales were 20.16 million units, up 4.9%, and export sales reached 15.41 million units, up 17.1%.

The automobile industry also saw growth. In May, retail sales in the national passenger car market hit 1.685 million units, a 10% month-on-month increase. Since the start of the year, cumulative retail sales reached 8.052 million units, a 5% peningkatan tahun ke tahun.

Export Growth

China’s exports of home appliances and automobiles continued to grow. In May, 410.214 million home appliances were exported, with a cumulative export of 173.8349 million units since the beginning of the year, menandakan a 24.6% peningkatan tahun ke tahun. Automobile exports also achieved double-digit growth, supported by global demand for China’s electric vehicles.

Supply Analysis

Steel companies have recently restricted production, resulting in decreased steel output. According to the China Iron and Steel Association, key steel enterprises produced 23.9404 million tons of crude steel in late May, with an average daily output of 2.1764 juta tan, down 1.49% from the previous ten days. Steel inventories are also declining, with key enterprises holding 14.5669 million tons by the end of May, a 13.43% decrease from the previous ten days.

Future Predictions

Li Zhongshuang believes that increased production and sales in manufacturing industries like automobiles and home appliances will drive demand for cold and hot-rolled coils. This demand is expected to support the stabilization and potential rebound of coil prices. Selain itu, limited supply will help balance the market, curbing further price declines.

“The supply resources available in the market will not increase significantly and may further decrease, helping to ease the supply-demand imbalance and stabilize prices,” predicted Li Zhongshuang.