China Steel Prices Trends Analytics

According to the latest market report, in March, more than half of the release of the downstream demand is still "slow" trend of the ups and downs of China steel prices, will directly affect the the spot steel city merchant mentality.In the past week, the major varieties of steel spot prices generally fall varieties weekly decline in more than 1%, which showed a larger hot-rolled steel.

According to the analysis, in the steel sheet market, the price decline has deepened.According to the review of the professionals in the market, the current round of steel price decline continued to the present, the domestic plate prices have fallen for 15 trading days from late February. Baosteel Plate April ex-factory price increase, but the price movements in the spot market are not with the formation of a "synchronization" effect, pessimism spread. This is mainly due to the downstream demand the release of poor, the complexity of the mentality of buyers, the rising steel trading business under constant pressure, shipped arbitrage willingness. Hot rolled coil decline is even more evident, Shanghai, Hangzhou, Jinan price weekly decline in the 100-190 yuan. Upside down and spot market prices due to higher pricing of some of the leading steel mills factory, serious, even if the margin constraint, a loss of serious traders or no choice but to give up to continue the implementation of the procurement plan.

Steel raw material prices also fell overall. According to related reports provided by the relevant agencies, the continued strength of the iron ore market, and finally transferred to the accelerated downside track. Ore in the domestic market in Hebei iron concentrate prices continue to fall, a weekly decline, t price of $ 20, the steel mills purchasing more cautious maintain low inventory strategies, thinly traded market. Imported ore prices fell sharply, 63.5% grade Indian iron ore fines Quote $ 134.5 per ton, down $ 13.75 a week; Platts 62% grade iron ore index of $ 133.75 per ton, down $ 13.25 a week. The Mine City market outlook is expected or downward trend, most of the buyers have fewer choices procurement.

Many factors affecting the iron ore spot market. Bureau of Statistics data show that the first two months of China's average daily crude steel output was 2.1263 million tons, the highest of the highest level for the same period in history, a high level of crude steel production, a huge inventory of steel oversupply further exacerbate the contradictions for more pessimistic steel prices, coupled with the introduction of the property market regulation and control of the five countries ", again stir around the real estate market, and in turn have a negative impact on the steel industry. Beijing International Mining Exchange believes that the downstream industry the continued bearish conduction to the spot price of iron ore, triggered last week's rapid decline. Short term, this downward trend will continue.

Overall, the volatility of the steel market in China is still getting bigger, and now is the national series of policies and implementation of a critical period in the mechanism of state regulation, the China Iron and Steel must carry out reforms in order in the world steel occupy a more favorable market low. Whether it is a large demand for hot-rolled steel and cold-rolled steel, the demand for middle-level galvanized steel, aluminized steel, as well as a triangular steel, etc., and their prices will in a reasonable price range.

Hot Rolled Steel From China

Recent data shows, State five rules promulgated led to relatively large fluctuations in the steel market, traders depressed mood, the market purchases enthusiasm weakened, closing the atmosphere is poor. Construction steel sheet products have appeared slipped sensitive hot rolled steel price decline.

Generally speaking, Domestic major cities Ф25mm three rebar average price of 3849 yuan (t price, the same below), compared to 4 or 6 yuan; the domestic key cities Ф6.5mm high line an average price of 3,718 yuan, compared with $ 4 or 4; domestic prioritiescity ​​5.5mm average price of hot rolled coil is 4013 yuan, down 37 yuan over the 4th; 1.0mm cold plate of the domestic focus of the central city average price of 4,939 yuan, compared with the 4th down 6 million; the domestic key cities 20mm plate average price3953 yuan, compared with 4 or $ 18.

China's GDP growth target this year as well as the increase in CPI of view, stable growth, control inflation is a main tone, means in the context of the loose global liquidity, China's policy-oriented under the premise of stable growth to prevent inflation rise will not sacrifice everything in order to maintain growth. Then for the steel market, in in financial effect amplification push up the price of rising channel, but also consider the needs of the Chinese entity performance, pull the power in the market is affected by the cost factor in the case of rapid increase in inventory, demand starts slow, weak people in the short term, steel prices has yet to reverse the signs of elevation. But the demands of the market holding stability has been strengthened, the steel city today is expected to gradually stabilize.

Factors affecting the domestic construction steel market, mainly the following aspects:

One is the leading steel mills steady mainly. The domestic steel prices shocks down, not many steel mills to adjust to the ex-factory price. Hebei Iron and Steel, Shougang Changzhi guide price of early March raised by 100 yuan / ton, while the East China Shagang rebar prices flat in early March, the whole month of February making it up 100 yuan / ton. Overall, domestic steel prices and market prices generally upside down, but at the cost pressure of circumstances, steel mills offer more to maintain strong price making it up are more limited.

The second is the majority of the raw material prices down. According to the monitoring data show that as of March 1, the Tangshan area carbon billet price of 3250 yuan / ton, down from Friday 50 yuan / ton; Jiangsu Province scrap price of 2900 yuan / ton, unchanged from Friday; Shanxi coke price 1470 yuan / ton, unchanged from Friday; taste dry Tangshan area, 66% iron ore price of 1170 yuan / ton, down from Friday 20 yuan / ton. At the same time, the external disk offer grade 63.5% Indian iron ore fines of $ 152.75 / ton 2.75 U.S. dollars / ton, down from Friday.

Third postganglionic steel stocks continue Masukura. According to the monitoring data show that as of March 1, the major varieties of steel inventory total of 21,583,600 tons, weekly chain Masukura 6.78% inventory increase has slowed compared to the previous two weeks, the downstream demand this week must start signs. Now, the total social stock has the same caliber of year-on-year increase in more than 1 million tons, and has hit a record high level of general annual inventory and more experience Masukura 4-6 weeks and then transferred to the downstream channel, so late The destocking task is arduous.

Of course, China policies will make some affect on China steel market, especially, steel prices will be affected. And according to internal prices of steel, the China steel prices will have a proper level.

The situation of China cold rolled steel in March 2013

In February, in China, the market price of cold rolled coil to the rising main. February 28, China's major cities 1.0mm cold plate an average price of 4952 yuan (t), up 111 yuan from the end of January. Shanghai, Tianjin, Beijing 1.0mm Omo box board market price of 4860 yuan, 5050 yuan and 5100 yuan, or 170 yuan, 100 yuan and 100 yuan. The other second-tier market price or 60-170 yuan.

Cold rolled steel prices rise, there are mainly two reasons; the one hand, a further rise in steel prices cost more sturdy supporting role. Businesses hoard, on the other hand, a very few, limited resources, market liquidity, resulting in fewer cold-rolled steel products, but prices continue to grow. For Spring Festival is expected to once again good psychological fermentation postganglionic the inertial pull up the role, the pace of rising market prices before and after the Spring Festival has never stopped.

Specifically, the following prices up in February, the domestic large steel mills in the mainstream again blew the horn rose. Especially early in the New Year's Baosteel will surprise the first to raise the price policy in March after the holiday, other steel mills raised prices well ahead of preheating. Indeed, after the Chinese New Year, Shougang, Angang Steel new one price policy have to implement, the March cold rolled rises in 200-250 yuan. The Hebei steel of cold rolled steel producers will also follow the trend of price increases policy, the latter part of the cost of supporting a further consolidated. Just has not been started due to the the postganglionic downstream demand, the price after a space up Xuzhang power tends to weak businesses mainly changed to a stable and a wait-and-see, expected real market revitalization in about 3 months late.

On the other hand, during the Spring Festival market resources around the part arrival, but the arrival of relatively limited, only a few cities in the bulk arrival. Moreover, some steel mills busy exports, a decrease in the amount of domestic resources. However, businesses hoard goods, stocking seek and secure the relatively rare a large number Dongchu operations. Therefore, after the Spring Festival, the market resources is small there is a growing, but still at a low overall inventory. The salable few resources, support a certain price. But if the latter continue to add resources, demand start slow price "late spring" may only adjustment will be more limited. Late start gradually, demand and steel prices are expected to return to a rising channel.

According to the previous experience, each year, in March and April, is the the downstream demand gradually start of period. With the weather warming, the downstream procurement will gradually start to recover, and then one after another active this year, the pace of urbanization is a "policy year" downstream producers overall than last year's strong vitality, is a good cold rolled steel market. The overall market is expected to occur in March and April, a "peak", downstream needs to start in early March or significantly slow the true sense of the market recovery is a process, not small adjustments to exclude individual time period.

China Steel Prices After Chinese New Year

Just the end of the Spring Festival, many steel trading business have started to the new year's work, more and more people are open for business, and steel prices rebound. Overall, however, the prices of finished steel were now significantly rise, including sheet metal products gains stronger than construction steel.

Monitoring shows that, the domestic key cities Ф25mm three rebar average price of 3925 yuan (t price, the same below), up 46 yuan from preganglionic; the domestic key cities Ф6.5mm high line an average price of 3,770 yuan before the holiday up 41yuan; domestic major cities 5.5mm hot rolled coil average price of 4,212 yuan, up 51 ​​yuan from preganglionic; 1.0mm cold plate of the domestic focus of the central city average price of 4,906 yuan, up 49 yuan before the holiday; domestic major cities 20mmthe board average price of 4054 yuan, up 67 yuan higher than before the holiday.

We know, from entering since 2013, many macroeconomic data show that the economy is slowly recovering. January export growth hit a 21 month high, PPI chain liters by the down turn, influenced by the Spring Festival Golden Week, the rapid growth in consumer. The market is generally believed that the economic rebound is expected to enhance the future economic growth will continue to rebound.CPI data, although affected by seasonal factors, the January CPI as expected to fall, but the view from the the Recent market participants forecast the February CPI data, the possibility of warming is still very large.

During the Spring Festival, the businesses in the market outlook is expected to better steel prices increased significantly, while around the arrival and more, so the obvious rise in the stock, recently merchant sales pressure is revealed. Inventory, as of last week, the 35 major markets nationwide rebar inventory was 8.4544 million tons, an increase of 930,800 tons; the wire stock 2,322,300 tons, an increase of 445,700 tons. From national wire rod, rebar, steel coil (hot rolled coil, cold rolled coils), the inventory total view of the plate, etc., a comprehensive national inventory total of 18,117,700 tons, an increase of 1.85 million tons, an increase of 11.37%.

At the same time, the postganglionic all varieties inventory increased in volume.According to the inventory statistics show that, as of February 19, 2013, the social inventory of the nation's major markets five varieties of steel was 18.016 million tons, an increase of 1.851 million tons compared with before the Spring Festival, rising for nine weeks in a row.The downstream construction as well as machining timber procurement earliest have to wait until the Lantern Festival after recovery, the steel market in the short-term need to guard against the risk of a sudden drop in steel prices.

The Opportunities and Challenges of China Steel Trade

2012 end of the world, the Mayan prophecy did not come, however, China's iron and steel industry has experienced a year real doomsday baptism; steel demand to drop steel prices continued to drop, monetary tightening, the banks pumping loan, funds flee, economic growth speed dropped, etc, the China Steel industry has been a big shock.

However, the optimism of the Chinese steel enterprises, or believe, after the big impact, Chinese steel trade markets, in 2013, there must be a big opportunity while waiting.

Opportunities one: the economic rebound, increasing government investment, sluggish steel demand will have a larger rebound.

Obviously, the 2013 steel market, given the high expectations, the first face of the domestic economy to pick up, has long been recognized, several consecutive months of manufacturing PMI index showed that China's manufacturing industry began to jump out of the trough, showing a clear active; coupled with the general direction of the countries adhere to expand domestic demand and promote development, it is foreseeable that in 2013 China's domestic consumption will be a further rebound in the auto industry is a very obvious good momentum; manufacturing industry rebound, cold rolled steel and hot rolled steel plate etc, which is demand likely to get a larger increase in the signal; this is a marked change since the fourth quarter of 2012.

Another aspect is the national macro-policy changes, the development of new towns in the direction of "Eighteen" established by the Conference, pointed the way for this year's investment focus; real estate, infrastructure, and other industries will benefit, they will start moving up; Moreover, the attendant equipment manufacturing market will also be a good situation to usher in a significant increase in orders; coupled on the 2012 Development and Reform Commission issued a series of steady growth measures, has begun to specific implementation, some of the utility by the end of the year be verified; the nearly trillion urban rail track construction project since the end of September last year, in the spring of 2013, launched one after another. Rebar, wire rod and other materials of construction steel demand is expected to continue growing.

Opportunities 2: steel trade enterprises left for the king, the short machine to carve up the market share has come.

There is no doubt that the steel industry since the crisis in 2012, so that the closure of many companies, including upstream steel mills, the triage center steel market, of course, is the steel trade enterprises; organization released survey data show that in 2012, around the country, nearly thirty percent of the steel trade and business failures or exit the industry. Dabai shu steel trade market as the country's largest steel trade concentrated in Shanghai, more than 3% of the annual GDP contribution rate in the Shanghai area near depression.

Overall, the 2013 steel prices market will be better than 2012, which is already reached a consensus; analysis, however, the steel trade enterprises in the face of the big opportunities in front of more calm response is required; good macroeconomic policy advantage, also need funding support to the implementation of specific future large investment projects to where to get enough funds, need further observation; another full of instability to the international economic situation, the financial cliff in the United States is only a temporary solution, how to defuse a brief lull greater after the crisis, but wait for the negotiations of the forces of political parties in the United States, the euro zone debt crisis continues to ferment, and unstable factors still exist; let alone domestic steel serious excess capacity, the spot market oversupply the general pattern of signs of improvement yet. So despite the new opportunities are not small, but the potential risk, and therefore need to be cautious.

The Current Economic Status Impacts China Steel Prices

Since the outbreak of the financial crisis in 2008, it continued to spread and deepen. The problem of a country's total steel consumption, it has a continuous. Currently, the global steel overcapacity problem is very serious, and want to excess capacity eliminated the need for many years. Excess capacity is a global problem, and is also an important factor in the steel trade-distorting. For China, could also be too large, steel prices cannot be sustained stabilization and recovery, the growth in demand for steel, even if it is a low-growth may not be able to bring about the growth of the steel, the profits from the products. The confidence comes from the steel consumption, industrialization prior to the completion of at least the next 10 years, should be a growth momentum was maintained, but must be a low-growth.

As the representative of the European and American countries, they are the center of consumption, the center of the capital output operation of so-called reform and innovation go too far, a bubble. Developing countries in the past ten years to become the world's manufacturing center in China, the cost advantage of developing countries to developed countries transport cheap goods, their consumption of transition. We export them out of the problem by the impact of exports and the corresponding affected many areas of production appeared excess. Get a lot of the profits of the assets mainly export-oriented country, by the original export. Brought them? Their own currency appreciation and undermine the international competitiveness of other industries in their own future appreciation when the three issues need to be adjusted, the adjustment process is a fairly lengthy process. China, for example, these years of us rely on the boosting of exports to GDP pulling now export problems, domestic demand needs people continued to increase revenue, improve spending power this form of adjustment is a long.

Steel industrialization support industry, secondary industry in the process of industrialization is the highest, the entire secondary industry in the national economy dominant process is the process of industrialization, industrialized secondary industry what is the construction industry and industrial composition. GDP growth in the process of industrialization first contributor is the second industry, the development of the secondary industry must bring consumption. Is the fastest per capita steel consumption in the industrialization process of the mid-to late industrialization must be from high growth to low growth. To a post-industrial society overall steel consumption will fall from the peak. It will continue to fall after a long time.

For steel situation in 2013, we believe that steel suppliers and production and consumption still have confidence, but we must fully understand that it is a low-growth, because the GDP in 2013 will this year. The tone of monetary easing should also be sustained. Especially a steady growth in new infrastructure projects will encourage investment to stabilize. After about 4-5 trillion out, especially the last two years on infrastructure, investment in fixed assets is highly controversial, but now look at the central government put forward, steady investment is an important measure of steady growth.

Generally speaking, it is a new year for Steel production in 2013, although, we also meet all kinds of problems, the economy of world is becoming better and there will be more good policy for Steel development in China, therefore, as long as we believe, whatever steel products like steel coil, steel pipe, steel sections, angle iron, ERW pipe, Galvanized Steel, etc, the prices will be proper level.

Latest Trends about Steel from China in 2013

From an economic development perspective, the fourth quarter of 2012, China's economy has finally emerged tended to stabilize, but the economic stability of the foundation is not strong, is expected in 2013 or even longer, China's economy will remain stable, compared with the fast development momentum. Expected based on the above, it is expected that the China steel will enter a stage of total consumption of low growth, the domestic steel market in 2013 will show a slight price fluctuations, a stable trend of the overall operation, including iron and steel enterprise meager profit situation is difficult to be effective in improving.

The world economy continued weakness result in international steel prices fall, affecting China's steel imports and exports.

International Steel City, a drop in demand a direct impact on China's steel exports.In 2012, the weak international economy, international steel trade has shrunk dramatically intensified trade protection and trade friction, in October last year, China's exports of billet 5.14 million tons, 1-October total exports of 40.84 million tons. November, December remained practically monthly 400 million -500 million tons of export levels, and this trend continued until at least the middle of next year. This also shows that within the next two years, the balance between supply and demand of China's steel market depends mainly on the domestic market, and look forward to expanding exports to ease the pressure on the domestic market is unrealistic.

On the other hand, from the domestic point of view, the next time there is still a lot of uncertainties, but overall, in terms of domestic demand, the urbanization of the 48 put forward, people's living standards improve requirements from the ability of the consumer spending habits popularity continue to promote home appliances and consumer conditions, the industry's long-term growth space still exist. From the outside, we need to look at the international market environment is relatively stable, the recovery in demand in the United States, Europe stabilized, the Afro-Asian emerging market demand remains strong, the demand on the international market will remain basically the trend this year, is expected to export growth is expected to be flat with last year.

There will be a greater demand from the machinery industry point of view, the special properties of the steel products. The machinery industry demand for steel diversity, both ordinary steel, another high-value-added special steel. Currently, there is part of the special properties of the steel restricting the development of China's machinery industry, the much-needed iron and steel enterprises in research and development of these varieties of steel. Such as electrical equipment industry, some transformer oriented silicon steel, power station boiler heat steel, special steel pipe and other special welding electrodes for steel and other special steel imports; wear plate (thickness required and if the heavy machinery industry from 30mm ~ 120mm), special welding wire, bearing steel, etc.; Another example is General machinery manufacturing, material not only has a certain mechanical strength, but also have some of the resistance to chemical corrosion, wear and other special performance.

Comprehensive analysis, expected in 2013 Chinese steel production and apparent consumption increase, it will not reach a high level, still low growth, is still the total consumption, low-growth stage; 2013 domestic the steel market will show a small price fluctuations, the overall running stable trend, including iron and steel enterprise meager profit situation will improve.