Strong domestic supply needs to be weak or promote the net export of coil to maintain the growth trend.
Since the beginning of 2024, the hot-rolled coil market is basically in the background of strong supply and weak demand, the market demand performance is low, the supply is at a high level, and the gap between supply and demand is expanding, or driving net exports to maintain the growth trend.
From the perspective of hot-rolled coil import and export structure, because China is the world's largest producer of hot-rolled coil, it has always maintained self-sufficiency, and the proportion of imports in supply has maintained a declining trend, while from the perspective of exports, with supply growth greater than demand growth, exports have become a breakthrough to release supply pressure, so exports are greater than imports, and China is a net exporter of hot-rolled coil.
From the supply point of view, more than 99% of China's hot-rolled coil supply comes from domestic steel production, since 2024, hot rolled steel production is not much, basically maintain full load production mode, and since March, with the price of raw materials fell, the cost line moved, steel profit margin restored to 100 yuan/ton above the level, profit or drive steel mills to maintain full production mode. It can be expected that the market supply will continue to maintain a high level.
From the demand point of view, the current real estate industry is relatively depressed, resulting in its related construction machinery industry demand performance is not smooth, to a certain extent restricting the machinery industry demand level for hot rolled coil; From the perspective of steel structure, the steel structure orders in North China and East China are relatively stable, but there are 13 provinces in the country to suspend the construction of infrastructure projects, resulting in the total order volume of the national steel structure industry less than the same period last year; From this point of view, the level of market demand in 2024 or continue to be in a relatively depressed state.
According to the highly positive correlation between net exports and the difference between supply and demand, it can be predicted that the net export volume of hot rolled coil will continue to increase in 2024. In terms of import volume and export volume, with the gradual increase in the production of domestic varieties of steel, the import dependence will continue to maintain a downward trend, which can be expected to show a decline in imports in 2024 or compared with 2023. In terms of exports, the domestic market is oversupplied, and the overseas market has become a good breakthrough in demand, which can be expected to continue the high export situation formed in 2023, and continue to maintain a high export level in 2024.
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