On July 11, according to the commodity market analysis system of the business community, the recent market price of hot rolled coil fell slightly. Specifically, at the beginning of the month, Tangshan and Jiangsu steel industry limited production rumors led to a positive rise in hot coil prices, but the demand side of the follow-up is limited, the late market is weak and volatile operation, traders more wait-and-see operation. On Friday afternoon, the black department dived, and some businesses lowered their prices. As of the 10th, the average price of the domestic hot roll market was 3872 yuan/ton, down 1.48% weekly. The business society pointed out that iron ore and billet prices fell, the off-season effect was obvious, the pressure on the hot roll social inventory increased, and the expectation for the policy was weakened, and the short-term hot roll price shock was expected to be weak.

Factors affecting the decline of steel market prices

Macro aspect

The macroeconomic expectations that supported steel prices in the early stage have weakened, and speculative funds in the steel market have chosen to ship to avoid risk, resulting in a shock decline in steel prices.

Production-storage aspect

According to the latest data from the business community, the hot rolled social inventory of 2.814 million tons last week, an increase of 88,000 tons per week, the weekly production of 3.0549 million tons, a decrease of 55,700 tons per week.

From the data, the social inventory of hot rolled coil continued to rise last week, and the rise rate accelerated. The production of hot rolled coil fell significantly, is the lowest point since the end of March, the production is low but the inventory continues to increase, the weekly table demand fell 4.9%, the off-season effect is obvious.

Cost aspect

As of the end of the afternoon of the 10th, the billet price of the business community fell 60 yuan from last Friday, a decline of 1.70%. Last week, the price of iron ore at the raw material end fell slightly, which led to the weakening of billet prices. Some steel enterprises in Tangshan carry out the overhaul plan, and now the profit of the finished material is better than the billet, the product structure tends to steel, and the billet supply has been reduced. Because the demand side has entered the off-season of the industry, the demand has slowed down seasonally, and the demand for billets has been negative. The fundamentals of billet supply and demand have turned into a weak situation of supply and demand, and it is expected that the short-term billet price will fall first and then stabilize and run weakly.

Demand side

With the deepening of summer, the impact of high temperature and rainy weather on the terminal construction has further increased, and the downstream production demand has been significantly suppressed, according to steel traders, most of the construction sites in Hebei Province are currently in a semi-shutdown state. In extreme weather, the demand is difficult to improve, and the information of hot rolled coil height is insufficient.