Steel Pail Raw Material Market Briefing: Cold-rolled Plate Prices Rose Slightly
With the continuous changes in the international situation, the Sino-US Geneva trade talks reached a joint statement on May 12, announcing that the 91% retaliatory tariffs imposed by both sides on April 8-9 would be cancelled from May 14, the 10% base tariff would be retained, and the 24% additional tariff would be suspended for 90 days.
As soon as the news came out, the cold trading atmosphere in the market eased, both traders and end users released certain purchasing needs, and the market transaction improved slightly. With the rebound of hot-rolled coil futures, the prices of cold-rolled products in some markets in the spot market rose yesterday morning, but the market transaction was slightly weak after the rise. Next, the author will briefly analyze the market outlook from the perspective of market fundamentals and price differences.
During the May Day holiday this year, traders basically had a 3-day holiday, and some end customers had a 5-day holiday due to order problems. Therefore, even if traders shipped normally, there was no obvious shipment volume, and prices were mostly stable. With the unsatisfactory futures trend after the holiday, and the meeting on the 7th, the market believes that it will take some time for the policy to be fully implemented, and the short-term price will still depend on the terminal demand. Therefore, the market mentality is mostly cautious and wait-and-see, and the overall purchase is mainly based on rigid demand. The price of cold-rolled coils not only did not usher in a good start, but even continued to decline. The national average price of cold-rolled coils fell below the 3,900 yuan/ton mark. With the easing of tariff pressure, the national average price of cold-rolled coils has not changed significantly. As of 17:00 on May 13, the national average price of cold-rolled coils was 3,866 yuan/ton.
From the perspective of the national price situation in the mainstream market, after the Sino-US Geneva economic and trade talks reached a joint statement on May 12, some traders in the South China market had a daily transaction of nearly 2,000 tons, and the intraday transaction performance was hot. Immediately afterwards, the market price rose rapidly by 70 yuan/ton yesterday morning, and the mainstream resource 1.0mm transaction reached 3,780 yuan/ton. It is reported that the trend in the previous futures was not ideal. The South China market also lowered prices to focus on transactions under poor conditions. However, the current resource costs are mostly concentrated above 3,700 yuan/ton. Considering that the slowdown in tariffs can enable some customers who are waiting to purchase, the market has significantly raised prices, and the price increase without actual demand support has been maintained for too long. Yesterday afternoon, the price adjusted slightly by 10 yuan/ton.
Compared with the rapid rise in prices in the South China market, the situation of cold-rolled coils in the East China market is slightly bleak. Specifically, the prices in the East China market have been mainly stable in the past two days. The slowdown in tariffs cannot drive the release of market demand in batches. Under the condition of heavy inventory pressure, traders are currently operating mainly to stabilize prices. According to merchants, the arrival of market resources in the first quarter was relatively slow, so the price fell faster, but from the perspective of price difference, the price difference between East China and South China still showed positive space. As the market arrival resources gradually returned to normal in April, but the terminal was not as expected, the previous price firmness gradually disappeared. Therefore, under the condition of active price increases in the peripheral market, the East China market was mainly stable.
