SMM Steel July 7, this week, the mainstream market resources are expected to arrive 151000 tons, an increase of 3000 tons over last week, the increase is mainly reflected in the Lecong market. The volume of goods affected by the price difference between the north and the south in Shanghai is still on the low side, and the recent arrival volume in Tianjin continues to maintain stability.
Table 1: comparison of arrival in mainstream markets
Source: SMM Steel
Shanghai market: from the point of view of recent arrival, the volume of goods in this market continues to be small, the supply of resources is still tight, and the fundamental performance of supply and demand is better than that of other markets, which forms a strong support for the spot price of the market. Coupled with the market macro-environmental preference, the mentality of traders is warmer than in the previous period, and the willingness to raise prices is enhanced, so it is expected that spot prices in the market will maintain a strong trend of volatility in the short term.
Figure 1: comparison of arrival volume and spot price in Shanghai market
Source: SMM Steel
Lecong market: the volume of goods arriving this week continues to increase, and the increment mainly comes from steel mills such as Wangang, Liugang and Chaoyang of Angang, which further increases the supply pressure in the market. At the same time, according to SMM's understanding, due to the influence of continuous overcast and rainy weather, there are more thread pressure, superimposed on the recent increase in agreement volume of hot coil steel mills, resulting in difficulties in capital flow among most traders, prompting it to speed up the pace of shipments to withdraw funds, and also to suppress the spot price of hot coils in the market. But do not worry too much is that South China is about to come out of plum, it is expected that after plum, the construction site resumes, the spot price of thread still has room to rise, which will lead to a rise in spot prices of hot rolls.
Figure 2: comparison between the volume of goods from the market and the spot price
Source: SMM Steel
Tianjin market: this week, the market volume remains low, the fundamentals are in a tight balance between supply and demand, and spot prices also show a narrow fluctuation trend. At the same time, according to SMM, the current inventory of traders in the market is low, and the willingness to reduce the price is weak, but the price is subject to terminal purchasing caution, so it is expected that spot prices in the market will remain in a narrow volatility trend in the short term.
Figure 3: comparison of arrival volume and spot price in Tianjin market
Source: SMM Steel
