The reasons of instability of steel prices

According to a recent market, the domestic steel market seems to have stabilized obvious signs of stabilization, the futures market has significantly improved, and the main reason is the estimated manufacturing PMI rebounded slightly, since the market bottomed steel plate two days phenomenon particularly evident. But even so, the downstream demand procurement still showed no obvious change, supply and demand pressures did not alleviate the Steel City, Steel City twist condition is not strong, so businesses are not optimistic attitude.

Steel market has been the downstream demand is flat light, season so, not to mention soon to enter the off-season. So, steel prices have been weaker, until recent date steel higher price very obvious mainstream city, the surrounding cities to follow suit to pull up, the market volume have rebounded, but this is only short-term stimulus act, end demand does not appear substantially upgraded .

In addition there was no substantial change for the better demand than the supply pressure, the Steel City is also no signs of improvement. Steel production enthusiasm is still high, from mid-May crude steel production statistics, the national average daily production of 2,185,400 tons of crude steel, the chain fell 0.35 percent in early May, but still living in historic times high. The May PMI index also showed iron steel industry production index for the month was 49.0 percent, up 4.1 percentage points rise. New orders index rebounded, which makes steel production activities are very active.

In addition, there is a very important factor, that is, raw materials market continued to decline. It is understood that this year, the iron ore market has been in a downward trend, steel procurement initiative suffered a heavy blow, there are also many mills intent to purchase select the sidelines, a further blow to market confidence. Platts index, the S & P futures rose 0.75 yesterday, is now 62% of Australian fine exponent $ 116.75 / ton. Tender price surge in imported ore mines significantly boost market confidence, so long since considered the iron ore market finally has a slight color, the market is bullish atmosphere is also strong, but now the price is still at a relatively low level, while the cost respects with the trend of steel prices have great relevance, raw material prices go up, which seriously hampered the cost steel prices upward, so as long as the market is still so raw materials decline, and that business confidence in the latter part of the Steel City will be significantly inadequate.

Generally speaking, the steel prices is affected by several different factors, as long as analytic the demand of all kinds of demand, we can make the wise decision about the future steel prices trend. In order to get latest prices of steel, like angle iron, hot rolled coil, galvanized steel, steel plate, H Beam, steel sheet, it is necessary for us to make a deep survey in China steel market.

The Trend of China Steel in April 2013

In view of the above analysis, China steel market can usher in growth, supply and demand in the degree of development remains to be seen. Short term, with the weather gradually gets warmer, the demand for slow release in early April will usher in a wave within a narrow range rebound, but the magnitude will remain limited, and in late still need to pay close attention to the latest trends of the market regulation. New "urbanization" policy, as China's economic growth momentum in the next decade, yet it remains on a conceptual level, only to various rules, the planning and the gradual introduction of the Steel City real good, in addition to all around the island announced details of the five countries bearish steel City, may still lead to early April to pick up market push.

Inventory, with the continuous release of the production capacity of China's iron and steel industry, the history of the highest point of the steel inventories continue to be refreshed, and the stock lowest point is gradually climbing, especially experienced for a long time or later in the macro side early positive superimposed boosted, inventory since 2009, the most visible and lasting rise, as of March 29, according to the statistics: Shanghai rebar inventory of 440,400 tons, an increase of 0.94%, a decrease of 0.3% last week; 485,000 tons Guang zhou MoM decrease of 7.62%, a decrease of 2.05% last week; 937,800 tons Beijing, a decrease of 2.4%, an increase of 1.67 percent last week; wire stock of 66,000 tons, an increase of 0.92% from last week, an increase of 4.64%; 478,000 tons Guang zhou MoM decrease of 11.32%, an increase of 0.56% last week; 92,500 tons Beijing, a decrease of 7.04%, an increase of 1.12% last week.

From sheet plate， as of last week, the domestic steel inventories finally emerged decline, but the plate decline rate has been relatively limited. Hot rolled coil and cold rolled coils inventory reduction of 3.9 million tons and 1.5 million tons respectively over the previous week; inventory of hot rolled coil, Wuxi market reduced by more than 3 million tons, is to reduce the most obvious market. The Tianjin market stocks also fell more than 10 thousand tons; Shanghai and Shenyang market increase of more than 10,000 tons. Little change over the stock market of cold rolled coils. This shows that the downstream industry demand is not great on the plate.

The demand side, while social stock rising demand for the release, but it falls short. Since March, the terminal site gradually return to work, steel demand release, but still significantly limited compared with a high level of inventory, the market destocking willingness markedly effective urgent. Macroeconomic data from February, however, the domestic economy is bottoming out and steady growth trend has not changed, but is still in the running state of sub-health and stable price policy of the central bank and the new "the country five" extremely rules promulgatedunder, the downturn in the steel city, once again increasing the pressure.

Overall, construction steel prices north and south of quite different, North China needs better rebounded pileare offer, the southern region due to continued sluggish demand continues to shock fall; and steel plate, hot-rolled steel market continued to fall, the market traded at its lowest ebb, cold rolled coils stabilize, plate steel steady downward. According to market monitoring: As of closing, 25mm two threaded average price of 3,654 yuan, more than last week, down 32 yuan; 25mm three threaded an average price of 3,703 yuan, down 30 yuan; 6.5mm high line price of 3647 yuan, down 82 yuan ; 5.5mm hot-rolled average price of 3,845 yuan, down 96 yuan; 1.0mm cold-rolled average price of 4,886 yuan, up 2 million; 20mm plate average price of 3,843 yuan, or 24 yuan.

This Year Steel Plate Market Will Get Better

Recently, Baosteel raised the ex-factory price . Including hot rolled steel plate, ordinary cold plate prices up 100 yuan / ton, pickling plate, hot galvanized plate prices by 80 yuan / ton, aluminum zinc plate prices by 120 yuan / ton, non-oriented electrical steel prices by 50 yuan / ton to 150 yuan / ton. Upward, the conventional specifications 1.0mm × 1250mm cold rolled coils (SPCC) listed price of 4356 yuan / ton (excluding tax, the same below), 5.5mm x 1500mm (SS400) table columns of hot rolled coil price 4062 yuan / ton, 3.0mm × 1250mm (SPHC) hot rolled coil listed price of 4312 yuan / ton. This is Baosteel following raised prices in March, the second time this year to the ex-factory price upregulation. Known as Steel City "benchmark," said ex-factory price of Baosteel round up, add a lot of confidence to the steel trading business.

Part of the plate metal traders said Baosteel round up prices in December expected. The overall increase, led by the ex-factory price of Baosteel and other large steel enterprises, the market sheet plate price during the year will continue steadily.

Recently, the steel plate market performance was significantly stronger than the long products, especially the strong market performance of hot-rolled coil. Compared to early September, the national average price of hot-rolled coil has risen to 750 yuan / ton, which price rises in October, November, about 300 yuan / ton. The Baosteel prices up disk appearance, to further promote the spot market price to rise. On November 12, the Shanghai market hot-rolled coil prices continued to rise, up 30 yuan / ton to 90 yuan / ton; cold rolled Hangzhou, Tianjin, Beijing, Guangzhou and other market prices are generally rising.

Steel supply side, this year, the last remaining more than a month into the maintenance period, a lot of steel mills, plate production rhythm slowed down, no significant increase in production. According to the situation of the steel trading business feedback, recently, the small number of steel hot rolled coil market resources, there are a lot of hot rolled coil steel mills for nearly two months did not enter the domestic distribution market, but a large number of for export. The early domestic sheet products exports maintained a high level, coupled with the increase in exports of its deep processing varieties, and to some extent alleviate the pressure on the supply of the domestic market. Nowadays, the hot rolled coil market in Shanghai, Hangzhou and other available resources generally tight, some even serious shortage, businesses offer substantial pull-up. According to the survey, in November, the major domestic steel hot-rolled coil plan to invest the amount of commodities to 800 million tons, cold rolled coil plan to invest the amount of commodities to 16.05 million tons, essentially flat with October. This helps ease the contradiction between supply and demand, and stabilize the market price. In short, the current sheet resources scarce, there is not enough resources to supplement and, in a certain period of time, in the case of rigid demand did not significantly reduce the prices may also continue upward.