I Analysis of Domestic Galvanized and Color Coated Steel Market in September

1.Review of the domestic galvanized and color coated steel in September

In September, the domestic prices of galvanized steel coils in most markets increased, while a few markets saw prices decline; The prices of color coated steel coil werew stable in most markets, while in some markets the prices declined.

As of September 27, SteelHome’s China Price Index was 4307 yuan/ton, being flat month on month; The price index of HRC was 3957 yuan/ton, with a month on month decrease of 59 yuan/ton; The price index of CRC was 4832 yuan/ton, with a month on month increase of 66 yuan/ton.

On September 27, the average market price of 1.0mm galvanized sheet in 18 major markets in China was 514 yuan/ton, up 44 yuan/ton month-on-month; The average market price of 0.476mm color coated sheet in 15 major markets was 6021 yuan/ton, down 5 yuan/ton month-on-month. Please see Table 1 and Table as following for details:

Table 1: 1.0mm galvanized steel price in major domestic markets

Source: SteelHome Database

Table 2: 0.476mm color coated steel price in major domestic markets

Source: SteelHome Database

2.Ex-work price of galvanized steel of major domestic steel mills mainly increased in September

Table 3: China’s galvanized sheet price policy of major steel mills in September

Table 4: China’s color coated sheet price policy of major steel mills in September

It is expected that the domestic steel mills will increase the futures price of galvanized and color coated steel by around 100 yuan/ton in October.

II Outlook on China’s Galvanized and Color Coated Steel Market in October

1. China Automobile Association: Automobile production and sales increased in January-August, 2023

According to statistics from the China Automobile Association, China's automobile production and sales in August were 2.575 million units and 2.582 million units, respectively, up 7.2% and up 8.2% month-on-month, respectively. From January to August, the production and sales of automobiles were 18.225 million units and 18.21 million units respectively, with year-on-year increase of 7.4% and 8%, respectively.

2. Market demands for galvanized and color coated steel is expected to increase in October

The PMI of China's manufacturing industry in August was 49.7%, an increase of 0.4 percentage points compared to the previous month. The new order index rose to the expansion range for the first time since April, accelerating manufacturing production activity and improving market demand. In addition, the government has issued intensive policies to stimulate the consumption of automobiles and household appliances, and it is expected that downstream demands for galvanized and color coated steel will improve in September.

According to the data released by the China National Bureau of Statistics in September, China's major economic indicators improved in August. Specifically, industrial production accelerated, fixed assets investment continued the downward trend, consumption growth increased significantly, exports grew month on month for three consecutive months, PPI became positive for the first time in the year, CPI returned to positive growth, M2 growth rate fell slightly, and manufacturing PMI index recovered for three consecutive months.

In addition, some regions in China have introduced policies to stimulate the consumption of automobiles and home appliances, and it is expected that domestic demand for galvanized and color coated steel will increase in October.

3. Supply of galvanized and color coated steel is expected to increase slightly in October

According to a survey of 38 domestic steel mills conducted by the SteelHome at the end of September, with the 115 galvanized steel sheet production lines surveyed, of which 111 were operating, so the operating rate based on production lines quantity was 96.52%, up 0.87 percentage points compared with that of the previous week. The daily average output of galvanized steel sheets for that week was 83,056 tons, up 700 tons compared to the survey of the previous week.

According to a survey of 32 domestic steel mills conducted by the SteelHome website at the end of August, with 70 color coated sheet production lines surveyed, of which 66 were operating, so the operating rate based on production lines quantity was 94.29%, being stable compared with that of the previous week. The daily average output of color coated sheet for that week was 24,600 tons, being stable compared with that of the previous week.

It is expected that the supply of galvanized and color coated steel in October will increase slightly compared with that of September.

4. Price trend of galvanized and color coated steel in October

It is expected that the prices of galvanized and color coated steel will increase by around 100 yuan/ton in October.