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[SMM hot coil analysis] the hot rolling profit of the steel plant is close to the warning line. How to carry out the cold heat transfer operation in August?
Jul 24,2019 18:35CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

Since July, the cold products of steel mills have not stopped falling after they have fallen below the cost line. In addition, under the pressure of continued weak demand, steel mills still have room for profit in hot rolling, and they have no choice but to continue to increase the total amount of cooling and heat transfer in order to survive. However, the current situation is becoming more and more severe, hot rolling profits in the continuous rise of iron ore and coke prices, gradually shrinking, resulting in the net profit of some steel mills has been close to the edge of profit and loss.

In this case, whether the cooling and heat transfer of the steel plant will continue in August, and how the total amount of conversion will change, SMM has carried out in-depth follow-up investigation. The specific feedback of the steel mill is as follows.

WG (Central China): cold rolling orders improved slightly in August, mainly due to an increase in procurement in the home appliance industry. At present, compared with cold rolling, the benefit of hot coil is higher, so the cold heat transfer operation continued in August, which is expected to be 560000 tons, a decrease of 120000 tons compared with July.

BG (North China): cold rolling orders improved slightly in August, mainly due to an increase in purchases in the home appliance industry. At present, the cold system of the steel plant has a loss of about 400 yuan / ton, and the net profit of the hot coil is on the edge of profit and loss, so the cold conversion operation continued in August, which is expected to be 20,000 tons, which is half less than that in July.

PG (Southwest): cold rolling orders in August are basically the same as in July. At present, the cold system of the steel plant has a loss of about 300 to 400 yuan / ton, and the net profit of the hot coil is on the edge of profit and loss, so the cold heat transfer operation continued in August, with a slight reduction of 5, 000 tons.

To sum up, as September is the peak production season for the automobile and household electrical appliances industry, under the influence of the reserve cycle, some terminals choose to purchase ahead of schedule from August to September, resulting in a slight improvement in the overall cold line order situation in August compared with July, coupled with the continuous contraction of hot rolling profits, the total amount of cold and heat transfer planned by steel mills in August is expected to be slightly lower than that in July.

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