SunSirs: Insufficient Cost Support, Coupled with Shrinking Demand, Profile Prices May Continue to Decline in the Short Term

　　Price trend

　　According to the profile index of SunSirs, the profile index on June 21 was 1,849 points, down 0.65% from previous day.

　　Analysis review

　　The main reason for the decline in profile prices on the 21st was that due to the impact of macro news, the market’s worries about short-term market conditions became stronger, and merchants cut prices for shipments.

　　In terms of cost, as of 5 pm on the 21st, Tangshan billet was quoted at 4,850 RMB/ton, a decrease of 110 RMB/ton from last weekend. This was mainly affected by the announcement of the joint research announcement in the morning. Iron ore prices fell, raw material prices fell, and cost support weakened.

　　In terms of supply and demand, on the supply side, due to strict production safety inspections and production restrictions, most steel companies stopped or reduced production, steel production fell, and the room for the downward price of profiles was limited. On the demand side, as the off-season effect became more apparent, the trend of demand reduction was difficult to change. It’s estimated that the fundamentals of profiles would continue to maintain a balance between supply and demand in the short term.

　　In terms of the market, due to the impact of macro news, the market became more worried about the price of raw materials. In the short term, the view on the profile market was negative. The market was affected by this and the transaction situation was relatively poor.

　　Market outlook

　　To sum up, the cost-side support has weakened, and the probability of continuing to decline in the short term is relatively high. The off-season demand in the superimposed industry has decreased significantly, market merchants are more wait-and-see, and overall profile transactions are poor. It is expected that the short-term profile market will continue to run weakly.