Affected by the continuous spread of the global epidemic, the production of plate terminal enterprises in most countries has stagnated to varying degrees, resulting in a sharp decline in global plate demand. In this case, the plate producers of various countries are forced to reduce the plate price and join the competition for the global limited plate demand market.
According to SMM statistics, on April 1, domestic steel mills quoted $425-$440 per ton of FOB, for hot-rolled coil exports, while Russian hot-rolled coil exports quoted $405-$410 per tonne for Indian hot-rolled coil traders or even lower. On April 3, the price of hot rolled coil in the international market continued to decline. India quotes 370400 yuan / ton FOB, Vietnam quotes 375-380 yuan / ton FOB. At this time, most of the domestic offer of $400-410 / ton FOB, is still higher than other markets.
Therefore, when the international plate market adopts the method of price exchange, the quotation of domestic hot rolled coil is not dominant. At the same time, in the case of domestic hot rolling coil production cost constraints and market demand still exist, Chinese steel mills and traders are not willing to continue to lower export prices to compete in the international market. As a result, the export volume of domestic hot rolled coil is further reduced, which aggravates the pressure on the supply side of the domestic market and promotes the spot price of domestic hot rolled coil to continue to bear pressure.
In addition, what is more serious is that the quotation of hot rolled coil abroad is generally lower and the actual disguised phase suppresses the spot price of domestic hot rolled coil. According to SMM, since mid-March, some steel traders have imported low-priced resources from abroad. Recently, a small number of resources have arrived at a cost of 3300 yuan / ton (goods ordered when the spot price of hot coils is about 3500 yuan / ton). In May, 15-200000 tons of hot rolls still arrived (the cost of arrival varied from 3, 000 to 3, 200 yuan / ton).
At the same time, the quotation of hot rolled coil in the international market is still falling, and domestic steel traders are ready to move, so it is expected that with the decline of export prices in the international market, the domestic import of hot rolled coil resources may gradually increase. As a result, the domestic hot-rolled coil market pressure is greater, thus suppressing the spot price of hot-rolled coil.
It is worth mentioning that although the price of hot-rolled coil in the international market continues to decline, there is a certain degree of impact on the domestic market, but there is no need to panic too much. Mainly because, on the one hand, the hot rolled coil resources delivery cycle is long, it is expected that the goods will be concentrated in May. On the other hand, the overall output of hot rolled products in Russia, Vietnam and other countries is not high, and the export volume is also very small compared with the output of hot rolled products in China, so the actual impact on the domestic hot rolled coil market is relatively limited, and the impact on market sentiment is even greater.
The proportion of Hot rolled Product output in domestic Hot rolled Product output in various countries
Source: world Iron and Steel Association
At the same time, due to the impact of the epidemic situation and serious losses, some steel mills have gradually taken the operation of reducing production. According to SMM, Posco in South Korea has closed its hot-rolled coil processing center in India, and all export hot-rolled coil plants in India have begun to reduce capacity utilization. In addition, the uncertainty of the international market caused by the epidemic still exists, so with the decline of the quotation in the international export market, steel mills from other countries may join the ranks of production reduction. To a certain extent, this will restrain the decline of the export price of hot rolled coil, and gradually repair the price difference between domestic hot rolled coil price and international export market price, so as to reduce the enthusiasm of domestic steel traders to import foreign hot rolled coil resources.