According to SMM statistics, the price gap between cold and hot has been shrinking after it reached a high of 570 yuan / ton in March and has now fallen to 280 yuan / ton, far below the average price difference of 545 yuan / ton in 2018.

Mainly due to:

The main results are as follows: (1) there are more new production lines in 2019, and most of them are concentrated in cold rolling under the national policy, resulting in the overall cold rolling supply pressure in 2019 has been at a high level;

(2) in the aspect of external environment: the trade dispute between China and the United States escalates and the macro pressure increases, which leads to the severe export situation, the reduction of domestic terminal orders, the contraction of steel mill profits and the decline of purchasing intention;

(3) in terms of domestic trade, the production and marketing data of automobile and household electrical appliances industry are not optimistic at present, and it is expected that it will be difficult to improve in the short term;

Therefore, under the current situation, the profit of cold rolling production and marketing in steel mills is decreasing. And according to research feedback, at present, most steel plants production and marketing cold rolling has been in a state of negative profit, so steel mills in order to ensure the maximum benefit, most of them have plans to reduce production of cold rolling in June, and the cold rolling base material will be transferred to the production of hot rolling. Judging from the maintenance of the steel mill, it has begun to appear.

Of which:

A Steel Plant (Central China) feedback: although there is no maintenance plan in June, but this month there is a plan to turn the cold rolling line into hot rolling production, and gradually implemented. The original planned hot rolling output is 287000 tons / month and the cold rolling output is 191000 tons / month. This month, the planned hot rolling output is 325000 tons / month and the cold rolling output is 175000 tons / month.

B steel mill (North China) feedback: in previous years, summer is the traditional cold rolling off-season, there is no transfer plan, mainly because the order is basically a long-term agreement, but the order trader reaction downstream demand is poor, the shipping situation is not good.

Overall, the June cold rolling is still in a state of weak supply and demand, but the cold rolling supply pressure will be transferred to the hot coil after conversion. Spot prices of hot rolls will continue to come under pressure.

Spot market: this morning spot prices generally continued the downward trend, in the afternoon due to the futures market compared with yesterday a little better, so traders sentiment has picked up, the willingness to back up a little bit. Among them,

In the Shanghai market, the quotation for mainstream resources fell 20 to 40 yuan per ton to 3850 to 3870 yuan per ton, resulting in weaker transactions.

Lecong market, today's mainstream resource quotations fell 10 yuan / ton to 3900 to 3950 yuan / ton, the transaction is poor, traders secretly fell more. Tianjin market: the price of mainstream resources fell 40 to 50 yuan / ton in early trading this morning, and rose 20 yuan / ton to 3790 and 3810 yuan / ton in the afternoon, and the transaction can still be maintained. [SMM Steel]