2023 Domestic color coated sheet coil market review and 2024 outlook

2023 color coated coil follows the overall steel price trend, the price center of gravity continues to move down, and it is the weakest variety among the cold series, with a decline of 11% throughout the year. In terms of production capacity, East China is still in the dominant position, but with the new production lines around the country, the proportion of each region has changed slightly. Exports improved in 2023, but there were also adjustments in export countries. Next, the author will conduct a brief review of 2023 combined with the fundamentals of the color coated coil, and make a simple outlook for 2024.

First, the price center of gravity of color coated sheet volume has moved down

As of December 29, 2023, the national average price of 0.476mm color coated coil 5891 yuan/ton, compared with the annual average price of 6723 yuan/ton in 2023, down 744 yuan/ton, down 11.07%, the decline has expanded compared with 2022. In 2023, the overall trend of the price of color-coated coil in the whole year is low in the middle and high at both ends, which mainly fluctuates with the price of raw materials. Among them, the highest point of the annual color coated sheet coil appeared in March, which was 6407 yuan/ton, the lowest point appeared in May, which was 5772 yuan/ton, and the annual high-low price difference was 635 yuan/ton, which was the weakest variety of cold plate varieties. The price is relatively flat in January and February, the weak decline in March and May is also the biggest fluctuation in these three months, and the overall trend in May and December is relatively flat. From the absolute price point of view, the price in 2023 is the lowest price in nearly three years, and the year-on-year price is lower throughout the year.

Second, the capacity utilization rate has been at the three-year median level for a long time

From the capacity utilization rate of color coated coil in the past three years, the high capacity utilization rate of 2021 will continue at the end of 2020, even in the Spring Festival, the capacity utilization rate has reached 60%. However, with the reduction of demand, capacity utilization began to gradually decline in the second half of 2021. The 2022 capacity utilization rate is the lowest level in nearly five years, and the annual capacity utilization rate fluctuates between 50% and 62%. Although the epidemic will be prevented in 2023, the real estate situation closely related to the demand for color coated coil construction in 2023 is not optimistic (from January to October 2023, the housing construction area of real estate development enterprises is 8228.95 million square meters, down 7.3% year-on-year. Among them, the construction area of residential buildings was 579.361 million square meters, down 7.7 percent. The newly started housing area was 791.77 million square meters, down 23.2 percent. Among them, the newly started residential area of 576.59 million square meters, down 23.6%. The area of completed houses reached 551.51 million square meters, up by 19.0 percent. Among them, the completed residential area of 40.079 million square meters, an increase of 19.3%), the overall demand for color coated sheet coil decreased significantly. Therefore, the overall capacity utilization rate of color coated coil in 2023 has not been significantly improved after the release of the epidemic, and basically fluctuates between 55%-64%.

Third, the total inventory of color coated sheet coil is at a high level for a long time

In 2023, the total inventory of color coated coil as a whole is relatively high in the past three years, but compared with 2022, the overall inventory trend is more stable, and the annual difference is 94,500 tons, which is the smallest difference in the past five years, but the accumulation effect during the Spring Festival this year is not obvious, and the reduction effect is also not obvious. The highest point of inventory appeared in mid-October 461,600 tons, the lowest point was 367,100 tons at the beginning of the year, the average annual inventory was 432,300 tons, and the inventory was at a relatively high level in the past three years. Before May, the total inventory of color coated coil was lower than the same period in 2022, but after May, the opposite situation was shown. As of December 29, the total inventory of color coated coil 427,700 tons, an increase of 59,700 tons year-on-year, an increase of 16.45%, the highest in nearly three years, which is also in line with customer feedback that the market is relatively cold.

Fourth, the profit of color coated coil production enterprises is meager

From the overall profit of the color coated sheet coil, in the cold rolling, galvanized, color coated three varieties, color coated belongs to the end varieties, mainly because most of the domestic color coated production enterprises are short process calendering enterprises, and color coated production line is different from the galvanized production line, do not need to preheat equipment, more with the ability to start and stop, so you can make timely adjustments according to the market rise and fall. Avoid exacerbating losses. At the same time, 70% is mainly used in construction, and most of the construction is in real estate, strictly speaking, China's housing has been surplus, and the peak of national real estate investment and construction has passed. In the long term, China's real estate industry is in the top platform range of the big cycle. Therefore, the demand in 2023 has fallen to a greater extent compared with previous years. From our comparison of the price of private color coated coil and the settlement price of mainstream hot coil in the northern region from January to June, the price difference between the market price and the mainstream settlement in 2023 is basically 1540 yuan/ton, and some months are as high as 1900 yuan/ton. Normal from hot roll to color coating, the processing cost of private steel mills is 1000-1300 yuan/ton. Maybe some people think that this year's color coated sheet roll profit is OK, in fact, it is not. First, the color steel envelope needed before the containment, the wall of the makeshift hospital need to use part of the color coated plate roll, with the end of the epidemic, these needs are directly zero, creating a large domestic trade gap for private enterprises in the north, some enterprises in order to ensure production, can only make profit sales. Secondly, the profit of color coating export orders is higher, and most steel mills with relatively saturated orders are more inclined to ensure export orders, and the competition in the foreign trade market is fierce, and the price phenomenon is serious. Therefore, from the perspective of sales model, color coating enterprises are polarized, high-end color coating orders are still in the hands of a small number of steel mills, and most private color coating enterprises have gaps in equipment, production line technology, and promotion mode, resulting in a small number of orders, the types of orders are relatively scarce, and only can maintain production line production by meager profits.

Fifth, color coated coil production capacity distribution

As of December 2023, the total production capacity of China's color coated coil is 54.94 million tons, including the production capacity that has not been dismantled in 3.23 million tons. From the perspective of the production capacity distribution of color coated coil, the first is still East China, accounting for 68.42%, down 1.02% from 69.44% in 2022; North China's production capacity accounted for 13.4%, and the more obvious increase in the proportion is South China, which increased from 3.93% to 5.75%. With the production of new production lines, the market pattern of color coated coil is quietly changing, and the production capacity of color coated coil is blooming everywhere.

Sixth, From January to November, the export of coated plate increased by more than 16.5%

Data from the General Administration of Customs show that the total export of coated plate belt in China from January to November 2023 totaled 5.983 million tons, an increase of 16.5% year-on-year. From January to November 2023, China's total imports of coated plates totaled 75,000 tons, down 8% year-on-year. Specifically, in 2023, the import of coated plate from May to August fell year-on-year, with the biggest decline in August; Compared with the export data, the export data is more optimistic, in 2023, there are 9 months of coated plate exports to achieve positive growth year-on-year, the remaining 2 months of exports year-on-year is only a slight decline, according to the overall export trend this year, 2023 annual exports are expected to be about 6.4 million tons.

In 2023, China's color coated coil was exported to 194 countries and regions, mainly to Asia, of which the top five countries accounted for about 30%. From the specific data point of view, the total export volume of China's color coated coil from January to November 2023 totaled 5.983 million tons, and the Philippines temporarily ranked first with 467,000 tons of exports from January to November 2023, accounting for 7.6% of the total export volume from January to November 2023. From January to November 2023, four countries in the top five export countries are temporarily negative growth, respectively, South Korea, Vietnam, the Philippines and Indonesia, of which South Korea fell the most. From the specific data point of view, the total amount of color coated coil exported to South Korea from January to November 2022 is 295,000 tons, and the total amount of color coated coil exported to South Korea from January to November 2023 is 213,000 tons, a year-on-year decrease of 82,000 tons, a decline of 27.8%.

In November 2023, China's total imports of color coated plates (with) totaled 4270 tons, an increase of 4.24% month-on-month and a decrease of 22.14% year-on-year. From January to November 2023, China's total imports of color coated plates (with) totaled 75,100 tons, down 9.32% year-on-year.

Seventh, Outlook for 2024

1. New production capacity and production lines

In 2020-2023, the majority of color coating projects are under construction, and the characteristics are mainly manifested in two: first, the products of long process production enterprises continue to extend downward, and the layout of cold series products are mostly, and the first is to optimize their product structure; Second, it can take advantage of its own raw material trends to occupy its own place in the lower market. Second, new production lines are blooming everywhere, and there is another feature, that is, the scale tends to be larger. In 2023, eight new color coating production lines will be added, with a total production capacity of 1.9 million tons, and a single production capacity between 200,000 and 400,000 tons/year. In 2024, the planned new capacity is 2.07 million tons, and the production line is 8. New capacity will be added in North, East and Southwest China. The new production capacity in 2023 is not added according to the statistics in 2022, mainly due to some projects have a certain delay, one is due to the overall demand performance of color coated coil in 2023, and the other reason is that the current photovoltaic is more hot, most steel mills have added zinc, aluminum and magnesium production lines to meet the needs of the market. With the continuous increase of production capacity in various regions, the color coating distribution structure is also continuously optimized, and the consumption of color coating sheets in the later period is mainly based on the local and surrounding 300 kilometers, and the peripheral digestion is supplemented. At present, the competition in the color coated coil industry is increasingly fierce, and steel mills that do not have scale and do not have their own brand advantages will gradually withdraw from the historical stage. Enterprises that seek new, change and high precision can survive and even stand out in this change in the future.

2. Color coated coil supply forecast

In the past 5 years, China's color-coated coil production capacity has continued to increase, but the output of color-coated coil has not shown a corresponding growth, but in the past 3 years, the output has shown a V-shaped trend. In 2021, China's color-coated sheet coil production capacity of 51.09 million tons, the output of 28.67 million tons; In 2022, the annual production capacity increased to 53.19 million tons, but because of the epidemic, domestic and foreign economic development is not optimistic and other environmental impact, production has declined to a certain extent, in 2022, China's color coated coil production totaled 25.71 million tons, down 10.32% from 2021. In 2023, the production capacity of color coating continued to increase, and the production capacity of color coating sheet coil reached 55.26 million tons in 2023, and the output was 27.63 million tons, an increase of 7.46% year-on-year. Mainly after the epidemic was released, the major steel mills increased their full power production, but the output did not reach the high point in 2021, mainly because the overall real estate trend this year is not optimistic. In terms of product characteristics, color coating for construction is still the mainstream trend, but high quality and new varieties have become the key objects of attention, and home appliance color coating board, new energy vehicle color coating board, etc., may have a certain increase. From the supply side, the author expects the annual production of color coated coil in 2024 or 28.5 million tons, mainly considering the current export situation or continue to maintain good, old city transformation or can drive part of the demand, although the output in 2024 has a certain growth compared with 2023, but it is still difficult to reach the level of 2021 and before.

3. Import and export forecast

Data from the General Administration of Customs show that the export volume of color coated coil in November 2023 was 5.98 million tons, an increase of 16.5%. It is expected that the annual export volume of color coated coil in 2023 will reach 6.4 million tons, and the annual import volume of color coated coil in 2023 will reach 84,000 tons. In recent years, China's cold-rolled coating products continue to extend, products continue to enrich, the future of color coated coil production continues to release, the combination of internal and external needs under the background, the export market will still be worthy of favor, China's color coated products outward export will continue to maintain. In 2024, it is expected that China's color coating exports or a small decline, is expected that the annual volume of color coating plate exports or will reach about 6.3 million tons, imports or about 90,000 tons.

4. Price prediction

Finally, in terms of price, the 2022 color coated coil is the smallest decline among the cold series varieties, and in 2023, the color coated coil is the weakest among the cold series varieties. The annual price center of gravity in 2023 will move down 11.07% from 2022, the overall environment in 2024 or a cyclical bottom rebound, the national average price is expected to move up slightly in 2024, but the overall space is not large, it is expected to rise by about 4%, and the overall price trend or show a low before high trend.

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