SMM Steel, April 28, this week's mainstream market resources delivered a total of 89000 tons, down 41000 tons from last week.

Table 1: comparison of arrivals in mainstream markets

Source: SMM Steel

Recently, the market of Shanghai and Lecong are affected by the price difference between the north and the south, the resources of northern steel mills are blocked from going south, and most of the resources of steel mills remain for sale in the north, resulting in a decrease in the arrival of southern resources.

Combined with the arrival volume and spot price of the two markets, the arrival volume of the market has remained low since the end of March, and the terminal demand has rebounded compared with the previous period, which is basically in the state of gradually reducing the stock, which supports the spot price of the two markets. According to SMM statistics, the spot price of hot rolls in Shanghai market has risen by 60-80 yuan / ton since April, and the spot price of Lecong market has increased by 70-90 yuan / ton.

Figure 1: comparison between incoming Volume and spot Price in Shanghai Market

Figure 2: comparison of market volume and spot price

Source: SMM Steel

On the contrary, in the northern region of Tianjin market arrival volume remains relatively high, but strong support by their own demand (according to SMM, most of the northern terminal production and processing of more primary products, simple technology, less affected by the epidemic and exports, demand recovery is relatively fast), spot prices also remain relatively strong. Since April, the spot price of hot rolls in Tianjin market has increased by 60-70 yuan / ton.

Figure 3: comparison between incoming Volume and spot Price in Tianjin Market

Source: SMM Steel

Overall, in terms of the current high inventory and terminal demand, due to the recovery of high inventory and terminal demand is less than expected suppression, the short-term north-south price gap or difficult to open, the north resources southward resistance is difficult to improve, so it is expected that the short-term Shanghai, Le from the two markets will continue to less volume, spot prices will also remain strong. In the northern market, with the increasing investment of resources, the pressure of follow-up supply intensifies, and the spot price is also under pressure.