This year has been a bumpy one for China's construction machinery industry. After the Spring Festival, steel prices surged sharply. From February 20th to April 8th, the cumulative increase in price of 20mm grade III rebar in the Shanghai market was over 500 yuan/ton. Among the various factors driving up prices, the rising cost of steel, represented by iron ore, was the main driver of this trend. By April 8th, the market price quote for 25mm grade III rebar had generally reached over 4600 yuan/ton, and the futures contract price for RB1010 had already reached over 4800 yuan/ton. We believe that at this price level, the portion of the cost increase has been basically fully covered. In the future, cost-driven factors will no longer be the driving force behind price increases. Market attention will gradually shift from cost-driven factors to basic supply and demand relationships. Especially as we enter the peak construction season, the extent to which downstream demand for building steel is released, and the degree to which this release changes inventory levels, will become the decisive factor in determining the direction of the market.
Cold and Hot Rolled Coils: Both cold and hot rolled coils saw slight declines. Among them, the East China market experienced an accelerated decline. The price of 1.0mm cold-rolled steel plate in Shanghai was 7070 yuan/ton, down 130 yuan/ton. A buy-on-strength rather than buy-on-weakness mentality increased the atmosphere of market hesitation. Currently, inventories are starting to rise. By the weekend, the cold-rolled inventory in Shanghai was 299,000 tons, an increase of 1,000 tons from last week. The Central-South region saw price drops in both cold and hot rolled coils due to pressure on cash recovery and sluggish demand. The price of 1.0mm cold-rolled steel plate in Guangzhou was 7050 yuan/ton, down 33 yuan/ton from last week. The North China market remained stable with a downward tendency. The Tianjin market showed significant declines. Currently, the price of Benxi Steel 1.0mm box plate is between 7100-7150 yuan/ton, with a drop of over 100 yuan/ton. The Beijing market, affected by the Olympics, faced difficulties in resource circulation but maintained stable prices due to low inventory. The Northeast market remained stable except for a slight drop in Shenyang. The mainstream quote for 1.0mm small-face box plate in Shenyang was 7280 yuan/ton, down 20 yuan/ton from the previous weekend. The Southwest market saw chaotic dealer quotes due to weak local demand. Market concerns include: first, the domestic market is currently in a consumption off-season, with sluggish market transactions; also, the rapid growth in production of cold and hot rolled coils has increased market supply pressure. Second, high prices for cold and hot rolled coils have placed significant cost pressures on downstream industries, impacting demand.
Heavy Plates: Overall, there was a trend of stability with slight declines. Current market demand is weak, with sluggish transactions. Approaching the end of the month, facing payment deadlines for ordering goods from steel mills, some merchants were short on funds, under heavy sales pressure, and eager to liquidate their stock, leading to more price cuts and declining market prices. Among them, the heavy plate prices in the major markets of East China retreated. Inventories of ordinary plates and low-alloy medium plates from large and medium-sized steel mills were relatively low, keeping prices relatively stable. Private enterprises had relatively more ordinary plate resources, causing prices to significantly decline. Weak downstream demand and a thick atmosphere of hesitation resulted in poor trading conditions in the North China region, but prices remained relatively stable. The heavy plate prices in the Central-South market slightly declined. Some dealers reduced prices to ensure sales volume, but due to high steel mill prices, the market's decline was limited. The Southwest region saw weak demand and poor dealer sentiment, resulting in significant declines in heavy plate prices. For example, in the Kunming market, Liugang 14-20mm ordinary plates fell by 150 yuan/ton. Heavy plate prices in the Northeast market remained stable. Affected by slow deliveries from steel mills and transportation issues, the inventory of medium plates in the major markets of Northeast China was at a relatively low level, maintaining stable dealer quotes. Market concerns include: first, the total inventory of the national heavy plate market was 984,550 tons, a decrease of 7,040 tons from last week. The heavy plate inventories in Shanghai and Guangzhou were 288,730 tons and 132,000 tons respectively, decreasing by 8,150 tons and 3,000 tons. The heavy plate inventory in the Beijing market was 28,000 tons, increasing by 1,000 tons. Second, specialty plate prices have seen a retreat from their highs. The mainstream trading price for shipbuilding plates (12-20mm CCSA) was 7,050 yuan/ton, while the mainstream price for boiler plates and 16MnR container plates (14-20mm) was around 7,220-7,260 yuan/ton, down 50 yuan/ton from last week.
These data severely impacted many machinery factories. Experts point out that inflation may experience a "retreat" phenomenon at some point, indirectly stimulating consumption. Some manufacturers worry, while others are concerned. Of course, everyone must remain vigilant and adapt flexibly to changing circumstances. Our SenTai Machinery Company has made all necessary preparations and will absolutely not allow product quality to decline due to various objective factors. Winning more customers during these stringent times is also a good choice.
Article source: http://www.stssx.com/news/148.htm