The operation of galvanized channel steel merchants is basically based on shipments. Because the demand has always been tepid, and the trend of upstream raw materials is mainly stable and sideways, the coating market is not stimulated by much good news. It is difficult to make a turnaround. At present, the daily shipment volume of merchants is relatively average. Take Boxing as an example: a household’s daily average shipment is about 100 tons, and the local color substrate price has been affected by poor transactions. This week, it has continued to fall. Zhou Lei fell by 80 yuan; while private color coating companies reported poor domestic trade orders and few inquiries, coupled with the continued decline in the price of upstream color substrates, color coating prices remained consolidating; while the price of galvanized thick specifications resources was temporarily stable. Although some large state-owned factories mostly implement the end-of-month settlement policy, some manufacturers have not made up for galvanizing for two consecutive months. Therefore, spot merchants mainly ship goods, and the price stalemate may continue. Baosteel’s June galvanized futures price cut by 100 yuan/ton also shows that Baosteel’s orders for related products are not ideal, and the market outlook is weak. The market said that Baosteel’s move also verified that the current market demand is still sluggish. The factory may follow suit and downgrade. It is expected that the domestic galvanized channel steel market prices will consolidate weakly in the short term.
It is understood that this price reduction is mainly due to the recent decline in steel prices, the shortage of business funds, the weakening of users’ ordering enthusiasm, and the impact of steel mills’ orders; secondly, the price decline is greater than that of steel, and steel mills still have room for profit. The price cut is Baosteel taking the initiative to make profit to the market while being cautious about the market outlook. Considering that Wuhan Iron and Steel and other steel mills' price policies in June are also likely to follow Baosteel's downward adjustment, this will weaken cost support. Production capacity remains high, the off-season effect appears, and the contradiction between high supply and low demand is difficult to resolve. In addition, exports of cold-rolled products fell sharply in March, leading to a rebound in the volume of most steel mills transferred to domestic sales in May, and domestic supply pressure will increase.
In summary, under the circumstances that the macro environment has not changed significantly and the terminal is cautiously purchasing on demand, the merchants are pessimistic about future generations. At the same time, they are faced with the pressure to pay for the steel mills in the middle and late ten days. Therefore, the merchants will make profits and take goods. Choice, the spot market price of galvanized channel steel is also facing the possibility of a callback.