SMM Steel, April 21, this week's mainstream market resources to a total of 130000 tons, an increase of 8000 tons from last week, still below the average arrival level of 167000 tons.
Figure 1: volume delivered in the mainstream market of hot rolls
Source: SMM Steel
Statistics show that the volume of goods from hot rolls to the volume of goods remained low this week, and the volume of shipments from Tianjin increased. It is still mainly affected by the price gap between the North and the South. The price gap between the north and the south has continued to shrink since March, and traders have increased their orders upside down, prompting traders to place fewer orders from northern steel mills. At the same time, in the case of more profitable sales in the north, the northern steel mills preferred to invest in the surrounding areas, so they took the initiative to reduce the resources in the southern market. Therefore, as a whole, the arrival volume from the market continues to be on the low side in the near future, while the arrival volume in Tianjin market is gradually increasing.
Figure 2: spot price difference between Lecong and Tianjin hot rolls
Source: SMM Steel
In addition, shipments to Shanghai have increased slightly this week. This is mainly due to the gradual resumption of shipment in Anshan Iron and Steel Co., Ltd., which was overhauled in the early stage, and the increase in the release of WISCO in Shanghai.
Table 1: details of arrival in mainstream markets
Source: SMM Iron and Steel (in tons)
Generally speaking, in the case of the gradual increase in the investment of resources in the north and the continuous decrease in the investment of resources in the south, the downward risk of spot prices in the subsequent northern market increases, while in the southern market, under the support of the gradual decline of the treasury, the spot price may be relatively strong, thus promoting the price gap between the north and the south to gradually open to a relatively normal level.