May's HRC prices may rise slightly

May's HRC prices may rise slightly Recently, China Iron and Steel Association released the crude steel production data in early April. It is estimated that the national crude steel output in the first half of April will be 2,213,900 tons, which will hit a record high. The proportion of crude steel used in rolled hot-rolled finished products also rose by 1-2 percentage points, and the output of hot-rolled coils also hit a record high of 14.978 million tons in March.

The recovery of downstream demand is slow, and the pressure on the HRC market is high. Despite the arrival of May, the destocking of hot rolled coils has not yet begun. The capital market was also corpse in April, causing a sharper decline in the sensitive coil market. First-tier cities' hot-roll quotes have set a new low this year. Analysts had previously inferred that spot prices for HRC in March and April might fall back, inferring that they are basically in line with market trends. According to the latest data from analysts, the trend of the enthusiasm for this month may have risen slightly, but the space is relatively limited.

Analysts in the industry have found through data studies that there is a negative correlation between changes in the ordering rate of steel mills and changes in steel prices. From the correlation between the ordering ratio of steel mills and the change in steel prices, the steel prices rose in the first three months of last year, and the ordering ratio of steel mills decreased as a whole. The steel prices continued to fall after the steel prices soared in April and August, and the ordering ratio of steel mills gradually decreased. As a result, steel prices rose sharply during the September-December period as a result of positive stimulus. The ordering ratio of steel mills decreased gradually.

This month, the ordering ratios of Tanggang and Shougang's hot-rolled coil board resources in the steel market in Tianjin all declined. The ordering ratio of Shougang fell by 30 percentage points, and the ordering ratio of Tangshan Steel coils decreased by 10 percentage points. According to the negative relationship between the proportion of orders and the trend of steel prices, it is predicted that the market price of hot-rolled coils will increase this month compared with April. However, compared to 55% of Shougang in March and 80% of Tangshan Steel, the pressure on the circulation of resources in the Tianjin steel market this month was similar to that in March. Therefore, it is difficult to judge the price of steel this month to exceed March. Last year, the flow ratio between the regions of the HRC resource area was reduced. In addition, the transparency of information, the price changes in Tianjin and Chongqing in the northern region once led the rise and fall in HRC prices in the country. Therefore, taking the Tianjin steel market data as an example, it is representative.

The average ordering volume of hot rolled coils of the five northern steel mills such as Shougang, Tangshan Iron and Steel, Handan Iron and Steel, Anshan Iron and Steel and Benxi Iron and Steel was 71% this month, a decrease of 9 percentage points from April, indicating that the pressure on the supply of resources for the circulation market was lower than that in April this month. However, it still rose by 10% from March. Therefore, the volume of HRC sold this month will be lower than that in April but still higher than March.

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