The market waits to see steel prices again

Last week, the domestic steel market price fell from an upswing to a full fall. The steel market rebounded since the end of March has come to an end. Although demand for steel has risen in the recent peak season, market transactions have supported higher steel prices. However, with the short-term saturation of downstream purchasing space and the continuous decline in the forward prices such as ** and electronic trading, market confidence has been frustrated and end-users are gradually entering the wait-and-see phase. , high willingness to accept goods weakened. At the same time, the early traders huntered down resources ** operation increased, the steel price is not stable, pressure fell. On the whole, the current downturn in steel prices is due to the adjustment of demand after the market has soared. There has been no major change in the fundamentals.

As of April 18, Shanghai 8mmHRB400 plate coil transaction price was 3400 yuan / ton, compared with the previous weekend fell 50 yuan / ton; Ф6.5mmHRB235 high line transaction price was 3260 yuan / ton, compared with the previous weekend fell 40 yuan / t; The transaction price of Ф20mmHRB400 rebar was RMB 3,250/t, which was RMB 50/t lower than the previous weekend; the transaction price of 5.5* 1500 PSP was RMB 3,370/t, which was RMB 10/t lower than the previous weekend; 1.0* The price of 1250 Prairie was RMB 4040/ton, down RMB 10/ton from the previous weekend.

Last week, the performance of the capital market was poor, and the number of electronic discs continued to fall. It was a sharp dive near the weekend and the attitude of traders deteriorated. The wait-and-see atmosphere was getting stronger. At the same time, due to the favorable dilution of the previous period, the slowdown in demand recovery and the renewed bad news, the steel price continued to rise, and there was a situation where the price of the steel price rose. Coupled with the sharp rebound in steel prices, the lower reaches of the procurement of high-level resources are cautious, the market turnover has dropped significantly. However, due to the current support of raw material costs, market inventories remain downward, and steel prices are unlikely to drop sharply.

In terms of the short-term market, the author thinks that the following two factors need to be considered:

On the one hand, the news was bearish, resulting in insufficient confidence in the market outlook. From the economic data of the first quarter of this year, the growth rates of various indicators such as industry, investment, foreign trade, and domestic demand have all declined to varying degrees, especially since GDP has increased by 7.4% year-on-year, failing to reach the set target of 7.5%. capital market. And taking into account the overall regulatory ideas, the recent government is unlikely to introduce favorable stimulus measures. At the same time, market sources said that in the first quarter, the real estate market volume fell sharply, resulting in an increase in the bearish steel market, leading to the lack of confidence in the market outlook for businesses, price increases will increase shipping.

On the other hand, the resumption of production of steel plants has accelerated and supply pressure has increased. According to the latest data from the China Iron and Steel Association, the average daily output of crude steel in key steel enterprises in April was 1,747,300 tons, an increase of 78,300 tons, which rose by 4.69% compared with the previous period; the national average production of crude steel was 2,151,500 tons, with an increase of 78,300 tons. The contract rose by 3.78% during the ten-month period. In the trend of keeping raw materials at a low level and spot prices continuing to rebound, the profitability of steel mills has increased, the production kinetic energy is sufficient, and the rate of production recovery has been accelerating, resulting in a significant increase in overall market supply pressure. At the same time, the recovery of demand for downstream steel has slowed down, the willingness to purchase has weakened, the contradiction between supply and demand has once again become apparent, and the market needs to find new balance after adjustment.

In general, the shrinking demand and the declining transaction result in the spot market falling sharply, while the increase in supply forces the steel price to face further pressure. In the short term, steel prices will continue to fluctuate slightly.