The "Golden September and Silver October" has passed. The market trend of cold and hot rolled coils has not been as expected by steel traders. Instead, the overall market has fluctuated. Since late October, steel prices have fallen sharply. This has given steel traders a basic understanding of the market outlook Be cautious.

On October 29, Li Zhongshuang, general manager of Shanghai Ruikun Metal Materials Co., Ltd., said in an interview with a reporter from China Metallurgical News that from the perspective of supply and demand, it is expected that there will be insufficient power to support the price increase in the cold and hot rolled coil market during the year. Prices will be based on consolidation.

First, the effective demand of downstream terminals is difficult to release significantly. In recent years, the production and sales of major downstream users of cold and hot rolled coils such as automobiles and home appliances have been poor. On October 28, a leading company in the automotive industry announced that due to the spread of the new crown pneumonia epidemic, the supply of chips has been cut off. Its automobile production plummeted by nearly 40% in September, the first decline in nearly 13 months. Since the beginning of this year, the problem of chip supply interruption caused by the epidemic has continued to affect China's auto industry, and many auto companies have experienced production cuts or short-term shutdowns. In terms of household appliances, data from the National Bureau of Statistics show that in September, the output of China's four major home appliances (air conditioners, refrigerators, washing machines, and color TVs) dropped, with the highest drop of 18.5%. Li Zhongshuang said that since the second half of the year, the dual control of energy consumption has been superimposed on power curtailment, and manufacturing production has been greatly affected, and the demand for cold and hot rolled coils has dropped significantly. This trend is expected to continue in the fourth quarter.

Second, the output of cold and hot rolled coils will continue to decline. During the "Golden Nine and Silver Ten" period, the blast furnace operating rate of major steel companies across the country showed an overall downward trend. Although there was a slight rebound after the National Day holiday, as of October 22, the blast furnace operating rate of major steel companies in the country was still down 5.1% from September 3 . In the fourth quarter, the provinces will make every effort to complete the reduction of crude steel output, and it is expected that the output of cold and hot rolled coils will continue to decline.

The third is the rising cost of cold and hot rolled coil production. Recently, the market prices of iron ore, coke, coal and other steel raw fuels have fluctuated, causing the country to attach great importance to it. On October 19, the National Development and Reform Commission issued the article "The National Development and Reform Commission's Study on the Implementation of Intervention Measures on Coal Prices in accordance with the Law". On the evening of the same day, Zhengzhou Commodity Exchange issued an announcement stating that starting from the night trading on the night of October 20, 2021, the price limit of thermal coal futures contracts will be adjusted to 10%. That night, the main contracts of thermal coal, coking coal and coke futures will be adjusted to 10%. Limit down. For the steel industry, "power curtailment" means a decline in output, and "high electricity prices" means a rise in costs. In the face of this situation, the production costs of steel enterprises have risen, and in formulating steel ex-factory price policies, they basically rely on price support, which has also largely curbed the decline in steel prices.