In January, the price of medium and thick plate is limited

Looking back at the trend of the medium and thick plate market in December, the overall market performance continued to strengthen. The market price fluctuates with the narrow range of futures, and the downstream just needs to be released slightly. From the supply point of view, according to the monthly production performance of steel mills in December, the price of raw materials is high, the profits of steel mills are continuously compressed, the enthusiasm of the production end is not good, the operating rate of steel enterprises in the whole month shows a downward trend on a monthly basis, and the factory warehouse and social warehouse of the board show different degrees of decline. Supply decreased, the price difference between the north and the south continued to widen, and the northern steel mills were affected by environmental protection restrictions and weather, production capacity decreased, and resources decreased to the south. In terms of demand, the north is limited by temperature, and the demand for steel projects has declined; The resource pressure in the southern region is tight, and at the end of the year, the focus is on project payment and future project signing, and the overall market demand is in a downward trend. In the case of weakening resource supply and the resilience of downstream demand, the overall sentiment of traders in the middle plate is better than that of other varieties.

First, the overall review of the international market in December

In December, China's medium and thick plate export prices strengthened in a narrow range, up 5 US dollars/ton month on month. The international market slab prices fluctuate in a narrow range, of which Southeast Asian import prices rose 25 yuan/ton, CIS export prices rose 45 dollars/ton, and South American export prices were flat month-on-month.

Second, the overall review of the domestic market in December

(1) Production of medium and thick plate steel mills

From the perspective of our long-term tracking of the production of medium and thick plates, the supply of steel mills continued to fall in a narrow range in December, the maintenance and production reduction plan was promoted, and profits continued to be compressed. From the adjusted data of this website, the average capacity utilization rate in December was: 87.81%, the average capacity utilization rate in November was: 89.29%, down 1.48% month-on-month, and the data in the same period in 2022 was 87.46%, up 0.35% year-on-year.

(2) Medium and thick plate social inventory

From the situation of the market inventory tracked by this website, the thick plate production capacity in the domestic market in December is insufficient, and the inventory is maintained in a reduced state. From the average point of view, the average social inventory in December was 1.1479 million tons, and the average social inventory in November was 1.2611 million tons, down 9.86% month-on-month. In the same period of 2022, the average social inventory of 1.30300 million tons, down 1.53% year-on-year.

(3) Stock situation of medium and thick plate steel mill

From the situation of steel mill inventory tracked by this website, the stock of thick plate in domestic steel mills showed a slight weakening trend in December. From the average point of view, the average steel mill inventory in December was 734,300 tons, and the average steel mill inventory in November was 757,100 tons, down 3.10% month-on-month. In the same period of 2022, steel mill inventory averaged 782,900 tons, down 6.62% year-on-year.

(4) Monitoring of apparent consumption

From the monitoring of apparent consumption data, weekly data tracking in December consumption has declined compared with November. The average in December was 1.4546 million tons, the average in November was 1.481,300 tons, and the average in November 2022 was 1.430,200 tons. Month-on-month decrease of 1.81%, year-on-year increase of 1.70%.

(5) Domestic price performance of medium and thick plate

In December, the average price of the national medium and thick board was tested in a narrow range, and the market sentiment remained. In December, the average price of domestic general board was 4083.48 yuan/ton, and in November, the average price of domestic general board was 3986.82 yuan/ton, up 96.66 yuan/ton from November, an increase of 2.37%, and a decrease of 44.78 yuan/ton from the same period in 2022, a decrease of 1.10%.

The average price difference between hot rolled coil and medium and thick plate in December was 10.35 yuan/ton, and the average price difference between hot rolled coil and medium and thick plate in November was -0.59 yuan/ton, and the price difference increased by 10.94 yuan/ton. The data for the same period in 2022 was 42.91 yuan/ton, and the price difference narrowed by 32.56 yuan/ton compared with the same period last year. (Note: The price difference refers to the price of medium plate minus the price of hot rolled coil)

Third, January forecast: supply remains low, demand continues to fall, and spot prices fluctuate in a narrow range

On the supply side, under the influence of the annual repair plan of steel mills and the continuous narrowing of molten iron profits, the supply of resources in the later period is not high, and the operating rate of steel enterprises will remain low. And the spot market demand for carbon is still at a low level of volatility, steel mills have a "optimal carbon reduction" plan (to ensure the production of high-quality steel varieties to reduce the production of carbon plate), the late production of carbon plate is not expected to be high. The operating rate and capacity utilization rate of steel mills show a low shock trend.

In terms of circulation, the arrival of market resources is general, the price difference between the north and the south continues to widen, and the north is affected by environmental protection restrictions and weather and shipping speed, and the resources of north materials are reduced to the south. In central and southern China, the rate of resource consumption is moderate. Overall, near the end of the year, the financial pressure on steel projects has increased, the rate of resource consumption has slowed down, and the long association traders are in the passive replenishment stage.

In terms of demand, near the end of the year, steel companies' profits bottomed out, the downstream capital return was tight, and the demand of the steel market was in the stage of low shock; Although plate consumption is less affected by the weather, consumption can still be maintained in the short term. If demand continues to weaken, it may lead to the risk of a correction in spot prices.

On the whole, the weak situation of market supply and demand in January was maintained, and the inventory resources of traders were not high. If the country released good macro news in the later period, the support for spot prices was strengthened; As January approaches the end of the year, demand and consumption decline, traders passively accumulate, and prices will also have the risk of correction. The current market wait-and-see mood is still in, and it is expected that the price of the mid-board in January will show a volatile trend, but the upper and lower space is limited.

Contact us

If you have any question, please feel free to contact me by the email or telephone!

Mainly products cover Carbon Steel Pipe, Structural Steel Pipe, Fluid Steel Pipe, Boiler Steel Pipe, Carbon Steel Plate, Ship Building Plate and Pressure Vessel Plate, etc.