Industry News

Steel prices dropped behind the reason

October 15, 2021

November 2020 was an unusual month for steel factories and traders of cold-rolled galvanized varieties, and it was also the same month that both galvanized and cold-rolled coils rose across the world. October 2021 is also a month worth remembering, but the market this time is the opposite of the market in December last year. After the National Day holiday in China, the market began to fall. It fell slowly until mid-October, and then entered the fast decline channel in late October. For the current market situation, there are few optimists in the market, but more cautious people. Some customers think that this month has fallen nearly 1000 yuan tons, and the later fall space is limited. There are also some customers think that steel prices should fall in place, in order to have more rebound opportunities that cold rolled galvanized this wave of substantial price reduction why? The reason behind it, let's explore together.

In terms of cold rolling, before August, the capacity utilization rate of the national cold rolling mills has been maintained at more than 80% level after August, capacity utilization rate has been maintained below 80%, and dropped to 72% in October Galvanized, after the middle of July, the capacity utilization rate of galvanized steel mills has been below 70%, and the lowest to 63.76%, constantly refresh this year's low level of cold rolled galvanized steel capacity utilization rate is low, can also reflect the weak market demand from the side And in the case of cold rolled galvanized low capacity utilization, the market has still not been significantly improved, so that market confidence was again suppressed. 

In terms of mentality, an index greater than 50 means expansion or increase or rise, while an index less than 50 means flat. In terms of market mentality, the market is still confident in early October, mainly because of the expectation of silver ten. Therefore, in the first week after the National Day, the market mentality index was above 60 And when the market fell, the demand performance is depressed, the market mentality also fell rapidly from 710.775 on October 8 to 34.075 on October 5, cold rolling from 66.11 to 19 on November 5, galvanizing is no exception, from 79.52 to 19.44 market confidence in several degrees of pressure, become extremely fragile.

On the basis of the current downstream demand is difficult to improve significantly, the further decline of raw material costs leads to the further decline of the cost of cold rolled galvanizing. After the decline from late October to the present, the market transaction has been repeatedly depressed, and in the decline, the loss of early high price resources has been further expanded, and the market confidence has been suppressed for many times For the future market, the short-term profit factor lies in the northern heating season can bring the production limit impact of the major steel mills to complete the 2021 capacity reduction task of active production reduction and other later need to pay attention to the profit of the steel mill and the market inventory situation, it is suggested that customers should also pay close attention to the regional price difference and varieties of price difference.