“Golden Three” cold and hot rolled coil market will pick up

At the end of February, my country’s cold and hot-rolled coil market continued to fluctuate, with prices rising and falling, and overall transactions were average. The current market has strong expectations for the release of positive macro information from the National Two Sessions in March. On March 1, Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd., said in an interview with a reporter from China Metallurgical News that entering the “Golden Three”, the cold and hot-rolled coil market will pick up, and steel prices are expected to stop falling and rise.
According to Li Zhongshuang, in late February, the price of hot-rolled coil Q235B in the Shanghai market fell by 30 yuan/ton, and the price of hot-rolled SPHC dropped by 10 yuan/ton. During the same period, the price of cold-rolled coils in the Shanghai market ran smoothly, and the price of cold-rolled products was higher than that of hot-rolled products.
Overall, in February, my country’s cold and hot rolled coil market prices were in a downward channel. Taking specific varieties as an example, the price of 1.0mm cold plate produced by Anshan Iron and Steel Co., Ltd. fell from 4870 yuan/ton on February 1 to 4820 yuan/ton on February 29, a cumulative decrease of 50 yuan/ton; the price of 5.5mm hot coil produced by Shougang Steel dropped from 4870 yuan/ton on February 1 to 4820 yuan/ton on February 29. Prices fell from 4,010 yuan/ton on February 1 to 3,920 yuan/ton on February 29, a cumulative drop of 90 yuan/ton.
At the same time, in February, affected by the Spring Festival holiday, the production and sales of downstream industries declined. Taking the automobile industry as an example, data from the Passenger Car Market Information Joint Conference (hereinafter referred to as the Passenger Car Market Information Association) show that from February 1st to February 25th, retail sales in my country’s passenger car market reached 861,000 units, a year-on-year decrease of 25%. It was down 43% from the same period in January. During the same period, the retail sales of new energy vehicles reached 283,000 units, a year-on-year decrease of 22% and a decrease of 44% from the same period in January. The Passenger Car Association said that before the Spring Festival is the golden period for first-time car buyers. Due to the sluggish property market and stock market, residents’ consumption mentality is relatively conservative, the entry-level fuel vehicle market is weak, and consumption before the Spring Festival is not strong, combined with the previous rains in the Yangtze River Basin. Affected by the snowy and freezing weather, the energy replenishment and battery life shortcomings of electric vehicles have temporarily affected consumers’ purchasing confidence.
Regarding the cold and hot rolled coil market conditions in March, Li Zhongshuang believes that the “Golden Three” cold and hot rolled coil market is expected to pick up.
On the one hand, downstream demand is expected to accelerate. In 2024, expanding domestic demand and promoting consumption will remain the focus of economic work. The Ministry of Commerce has designated this year as the “Year of Consumption Promotion”. The two conferences across the country have made active arrangements for the development of the automobile and home appliance industries. A series of policies and measures to support bulk consumption such as new energy vehicles and green smart home appliances have been included in local government work reports. For example, Shanxi Province has proposed to boost bulk consumption such as new energy vehicles, home appliances, and electronic products, support rigid and improved housing demand, and promote large-scale equipment updates and trade-in of consumer goods. Chongqing proposes to boost bulk consumption, improve and implement consumption promotion policies for new energy vehicles, electronic products, smart homes, green building materials, etc., and promote large-scale equipment updates and trade-in of consumer goods by improving technology, energy consumption, emission and other standards. Guangdong Province proposes to promote bulk consumption of new energy vehicles, electronic products, home appliances, home furnishings, etc., promote the replacement of old consumer goods with new ones, and cultivate and develop key enterprises in trade and circulation. Shandong Province has proposed to actively promote bulk consumption, carry out comprehensive electrification pilots for public vehicles, promote the promotion of new energy vehicles, and accelerate the construction of charging facilities in public areas and residential areas… With the implementation of policies and measures to vigorously promote the consumption of automobiles and home appliances this year, The production and sales of automobiles and home appliances will increase significantly, which will drive an increase in demand for cold and hot rolled coils.
It is worth mentioning that the new round of large-scale equipment updates and the upsurge of trade-in of consumer goods will inject strong impetus into “steel demand”. The fourth meeting of the Central Financial and Economic Commission held recently studied large-scale equipment upgrades and trade-in of consumer goods, of which the potential domestic demand market is huge. Statistics from industry organizations show that in 2023, the number of cars in my country will be 340 million, and the number of major categories of home appliances such as refrigerators, washing machines, and air conditioners will exceed 3 billion units. The demand and potential for upgrading is huge, which may bring 10 trillion yuan. new markets above. “This round of large-scale equipment upgrades and the upsurge of replacing old consumer goods with new ones will definitely increase the demand for steel, especially the demand for steel for automobiles and home appliances such as cold and hot rolled coils will accelerate.” Li Zhongshuang predicts.
On the other hand, the downstream industry will usher in a production climax. According to the latest production scheduling report of the three major white appliances released by industry organizations, in March, the total scheduled production of air conditioners, refrigerators, and washing machines in my country was 36.94 million units, an increase of 17.3% compared with the same period last year. Among them, air conditioners are scheduled to produce 22.13 million units, an increase of 25.2% over the same period last year; refrigerators are scheduled to be produced 8.37 million units, an increase of 8.4% over the same period last year; washing machines are scheduled to be produced 6.44 million units, a 5.4% increase over the same period last year. “The substantial growth in discharge output of the home appliance manufacturing industry in March is expected to increase the demand for cold and hot-rolled coils, thus supporting the strengthening of steel prices.” Li Zhongshuang believes.
“The convening of the National Two Sessions will also bring substantial benefits to the macro level. The domestic macro environment will continue to be stable and positive, which will be beneficial to the operation of the cold and hot rolled coil markets.” Li Zhongshuang added.