Despite a slight upward opening of steel futures this morning, they failed to boost the spot market for square steel tubes. Due to poor sales and a pessimistic outlook on the future market, traders remain cautious with their pricing. The opening of the market in Shanghai, Beijing, and other peripheral areas was mainly characterized by a wait-and-see attitude. Throughout the trading day, steel futures experienced a sharp drop, again impacting the spot market, although there was a slight rebound near the end of the session, it was insufficient to boost market confidence, and some prices dipped slightly in the afternoon. In Guangzhou, sales remained unsatisfactory today, with intense selling desires from traders amid tight funding and high inventory levels. Rebar futures 1410 saw a narrow range of fluctuations, prompting spot traders to remain on the sidelines and continue with flat pricing. On the market front, local traders saw average sales, with daily trading volumes hovering around 100 tons, showing a general performance. Additionally, although Ansteel lowered the ex-factory price of rebar by 100 yuan/ton before tax yesterday, this adjustment had little impact on the spot market, mainly due to the significant over-correction by traders in the earlier period.
Although the factory's profitability is still satisfactory at present, the cost of finished materials has not continued to decline. Considering the partial settlement of merchants in the early stage, the steel mill's willingness to hold prices is slightly stronger, but the prices are clearly lacking in demand support. Merchants indicate that, according to the current settlement policy of Fushan, the profit and loss of early-stage sales resources are basically even, with a small amount of resources generating profits. The next period's order volume may continue to increase, primarily depending on the specific operational conditions of capital. Due to the generally low market inventory, the adjustment of short-term custom-sized square tube prices has a minor impact on the market. Conversely, market prices are nearing the bottom, and there may be a surge in merchants' bottom-fishing behavior in the near future. It is recommended to carefully consider ordering based on each factory's policies.
The market's fragile nerves are susceptible to being pressed down at any time, and the price's upward elasticity will diminish as the risks are not fully released. It will take time to break through the marginal cost and squeeze out supply. Therefore, the period of low-price oscillation will be extended, and it is very likely that after a certain period of consolidation, the iron ore price platform will drop to the next level. From the perspective of the market's hot-rolled specifications, the previously scarce 7.75-9.75mm sizes have been supplemented, with recent prices at 3600 yuan/ton. However, the total amount of hot-rolled thick coils remains limited, so the quoted prices from major agents remain firm. Recently, there has been a limited supply of thin coil resources, with the inventory from earlier periods gradually being depleted, and prices have remained relatively stable. However, such a stable market leaves second and third-level dealers without much room for maneuver, and the market activity has significantly decreased this year. Considering the above supply conditions, it is expected that the price of Lesheng hot-rolled coils will continue to consolidate in the short term. Today, the market prices in surrounding areas are relatively firm, with local merchants' prices slightly recovering. Market feedback indicates that current resources are relatively scarce, with severe shortages in specifications, and the amount of resources to be supplemented in the later period is not substantial. Based on the current situation of limited inventory and uneven specifications, the price trend of short-term fixed-length square tubes is stable with a slight upward trend.