The market price of cold and hot rolled coils is dominated by consolidation.

The trend of the cold and hot rolled coil market have not been as expected by the steel traders. Since late October, steel prices have fallen sharply, which have made steel traders basically cautious about the market outlook.

From the perspective of supply and demand, it is expected that there will be insufficient power to support the price increase of the cold and hot rolled coil market during the year, and the price will be mainly consolidating.

First, the effective demand of downstream terminals is difficult to release significantly. In recent years, the production and sales of major downstream users of cold and hot rolled coils such as automobiles and home appliances have been weak. Since the beginning of this year, the problem of chip supply interruption caused by the epidemic has continued to affect my country's auto industry, and many auto companies have experienced production cuts or short-term shutdowns. After the second half of the year, the dual control of energy consumption have been superimposed on power curtailment, and manufacturing production has been greatly affected. The demand for cold and hot rolled coils has dropped significantly. This trend is expected to continue in the fourth quarter.
Second, the output of cold and hot rolled coils will continue to decline. The operating rate of blast furnaces of major steel companies has dropped overall, and the operating rate of blast furnaces of steel companies is still down 5.1% from September 3. In the fourth quarter, the provinces will make every effort to complete the reduction of crude steel output, and it is expected that the output of cold and hot rolled coils will continue to decline.
Third, the production cost of cold and hot rolled coils has risen. Recently, the market prices of iron ore, coke, coal and other steel raw materials have fluctuated. For the steel industry, "power curtailment" means a decline in output, and "high electricity prices" means a rise in costs. In the face of this situation, the production costs of steel enterprises have risen, and in formulating steel ex-factory price policies, they basically rely on price support, which has also largely curbed the decline in steel prices.