Pingliang Observation Standard Distributors Discuss High Price Advantage

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　　Pingliang Observation Standard Distributors Discuss High Price Advantage

　　Since entering 2022, the cold and hot rolled coil market has been flat, and steel traders have accelerated shipments, generally maintaining a cautious attitude towards the future market. On January 20th, Li Zhongshuang, the general manager of Shanghai Ruikun Metal Materials Co., Ltd., stated in an interview with China Metallurgical News that with the implementation of stable growth policies, rising costs, and a decrease in steel inventory, it is expected that the price of hot-rolled coils will remain stable in the short term, while the price of cold-rolled coils will fluctuate slightly. According to Li Zhongshuang, since the beginning of this year, the operation of the cold and hot rolled coil market has not been stable, with fluctuating prices, both rising and falling, showing a phenomenon of differentiation. At present, the hot-rolled coil market has obvious characteristics of weak supply and demand,

　　It is expected that the week before the Spring Festival will be mainly stable, while the cold-rolled coil market will experience slight fluctuations. From the perspective of market conditions, steel traders generally feel that sales are not smooth, and downstream users basically purchase according to their needs. Some merchants choose to sell at a lower price in order to ship more, resulting in a common phenomenon of "hidden drop" in steel prices. However, overall, the mentality of steel traders is basically stable, and they still have expectations for the cold and hot rolled coil market this year. Li Zhongshuang believes that the current operating trend of the cold and hot rolled coil market will be maintained in the short term. Due to factors such as the "price but no market" during the Spring Festival, the prices of cold and hot rolled coils have been basically stable recently, and are expected to stabilize and strengthen after the Spring Festival. One is that the production and sales situation of downstream end users has improved, and the demand intensity is expected to increase. Taking the automotive industry as an example, in December 2021, the production and sales situation of the automotive industry improved, with both production and sales increasing on a month on month basis. The production growth rate turned from negative to positive, and the sales decline narrowed by 7.5 percentage points on a month on month basis. Entering 2022, the automotive industry has had a good start, with production and sales continuing to rise. According to statistics from the Joint Conference on Passenger Car Market Information, in the first week of January this year, the average daily retail sales of China's narrow passenger car market reached 58000 units, a year-on-year increase of 6% and a month on month increase of 27%. The China Association of Automobile Manufacturers predicts that China's automobile sales will reach 27.5 million units in 2022, a year-on-year increase of about 5%. Industry insiders believe that the demand for steel in the automotive industry will be approximately 56 million tons in 2022, a year-on-year increase of 2.8%. Secondly, the inventory pressure of cold and hot rolled coils is not significant. Statistics show that as of January 14th, the inventory of hot-rolled coils in 35 major markets across the country was 2.1962 million tons, a decrease of 11900 tons from the previous week, a decrease of 0.54%; The inventory of cold-rolled coils was 1.2125 million tons, a decrease of 0.15 million tons or 0.12% compared to the previous week. The third is the rigid cost support, which stabilizes and strengthens the prices of cold and hot rolled coils. Recently, the prices of iron ore, coke, scrap steel and other steel raw materials and fuels have continued to rise. For example, on January 20th, the Platts index price of 62% grade imported iron ore was $133.7 per ton, an increase of $14.2 per ton from $119.5 per ton at the beginning of this year. Due to the rising prices of steel raw materials and fuels, the cost pressure on steel enterprises has increased. Therefore, in formulating the policy of steel ex factory prices, the main focus is on raising prices, which provides strong support for the stabilization of steel prices.

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