[SMM Analysis] Next week, Shanghai's non-oriented electrical steel market will be in the doldrums, and there is still room for price reductions

Price Dynamics of Non-oriented Electrical Steel

Shanghai B50A800: 4,800-4,900 yuan/mt

Guangzhou B50A800: 4,400-4,500 yuan/mt

Wuhan 50WW800: 4,550-4,650 yuan/mt

Shanghai Market:

This week, the prices of cold-rolled non-oriented electrical steel in Shanghai generally fell, with no signs of improvement in overall market transactions. The HRC futures market showed significant strength this week. The Central Financial and Economic Commission meeting emphasized the need to regulate enterprises' low-price and disorderly competition in accordance with laws and regulations, guide enterprises to improve product quality, and promote the orderly exit of backward production capacity. This has raised market expectations for supply-side reforms and improved market sentiment. However, confidence in the non-oriented electrical steel market remains insufficient, with no expectations for a price rebound. In terms of fundamentals, state-owned enterprises mainly supply directly to terminals, with fewer resources from state-owned enterprises in the trade circulation sector. Due to poor expectations, producers are under pressure to take orders, and there is a significant hidden discount in the acceptance price of non-oriented electrical steel. Traders are cautious in purchasing, and downstream small terminal enterprises purchase on demand, lacking restocking motivation. Looking ahead, market transactions are expected to remain sluggish. Except for large terminals, downstream purchasing willingness is generally low. It is anticipated that Shanghai's non-oriented electrical steel market will operate in the doldrums next week, with room for further price reductions.

Guangzhou Market:

This week, the prices of cold-rolled non-oriented electrical steel in Guangzhou remained stable, with a weak trading atmosphere in the spot market. The ferrous metals series futures market showed a rally this week, which somewhat restored market confidence. In terms of fundamentals, the situation of weak supply and demand remains evident. Most traders have weak expectations, and even though their inventory levels of non-oriented electrical steel are low, their enthusiasm for purchasing and restocking remains low. Additionally, influenced by the traditional off-season, the market lacks expectations for a price increase, and downstream terminals' purchase willingness is generally low. Looking ahead, the pattern of weak supply and demand is expected to persist. However, the "anti-cut-throat competition" policy may boost market sentiment and curb bearish expectations. It is anticipated that Guangzhou's non-oriented electrical steel prices will operate in the doldrums next week.

Wuhan Market:

This week, the spot prices of cold-rolled non-oriented electrical steel in Wuhan fell, with average market transactions. In terms of fundamentals, the supply of non-oriented electrical steel resources from state-owned enterprises remains stable, with less spot supply of medium and low-grade products. However, market demand is weak, with limited new orders from industries such as home appliances and motors. Production rhythms have slowed down, with purchases made on demand and a lack of restocking willingness. Looking ahead, market participants generally hold a cautious wait-and-see sentiment. It is anticipated that Wuhan's non-oriented electrical steel prices may operate in the doldrums next week.