Construction steel prices fall or become a trend

In winter, the demand for construction steel is getting weaker. The ore prices in the upper reaches remain firm, and it is still up and down. The pattern of “strong supply and weak demand” of the construction steel city was basically established, and the Yindie fell later or became a trend.

There is a jargon in the stock market: "Long-term will fall." The recent construction steel market has fulfilled this statement and steel prices have been weakly down. As of the 16th, the newspaper reported a drop of 50 yuan per week at a price of 3820 yuan per ton. At present, the tonnage price of representative quality rebars for secondary rebars in Shanghai is around RMB 3,730; the rebars for quality rebars in Shanghai are quoted at around RMB 3,800 per ton, both down by RMB 50 from the previous week. Market participants believe that the construction steel market's sideways wait-and-see status has been as long as two weeks, and now it has finally come down. In the southern market like Shanghai, the supply of peripheral steel plants is supplemented, and the lower prices of northern resources are also brought south, and the difference in the cost of holding resources for market resources is also widening. In addition, in the winter season, the real demand in the downstream has gradually weakened. Under the background of high steel prices, the demand for goods at the end of the year has been hesitant, and the downward pressure on steel prices has become reasonable.

The desire of the steel mills to increase production is strong, but there are differences in the factory pricing. Baosteel, the leading company in the domestic sheet industry, has taken the lead in introducing the December ex-factory price. The ton price of cold rolled, hot rolled and other mainstream products has been fully raised by 80 to 120 yuan. This is the second time that Baosteel has fully raised the ex-factory price. The situation in the sheet metal market is getting better. However, the latest pricing of construction steel manufacturers is based on stability and reduction. At present, the inversion phenomenon of the factory price and market price of the dominant steel mills still exists, which indicates that the downward pressure on steel plant pricing is still relatively large. According to the latest statistics from the National Bureau of Statistics, domestic crude steel output increased by 2.1% year-on-year in the first 10 months of this year. Among them, the average daily output of crude steel in the month of October decreased by 1.3% from the previous month in September, but it was still at a high level. With regard to the release of steel production capacity, the industry’s general impression is that, given the severe overcapacity of crude steel, once steel companies’ profits improve, the willingness of steel mills to increase production will immediately become strong.

Iron ore market is still an old problem: it is easy to rise and fall. Currently, after a rebound, the ore price remains strong. In the domestic ore market, the price of iron concentrate in Hebei remained basically stable, and the ore inventory of steel mills remained at around 10 days, which made the overall turnover of the iron concentrate powder market relatively light. The price of imported ore was slightly higher, with 63.5% grade Indian fines quoted at US$123 per tonne and up by US$1 per week. According to relevant data, China’s iron ore imports fell to the lowest level in the year in October, which was a drop of more than 13% from the previous month. However, the increase in ore prices throughout the month of October was close to US$15 per ton. Many buyers in the mining market are watching the currency and wait for further clarification of the direction of the price.

Analysts of relevant institutions believe that after entering November, the construction steel market has had a difficult performance on demand, but the pressure on supply has increased. At present, the downward pressure on construction steel prices indicates that the pattern of supply and demand stagnation in the previous period has been broken down and replaced by the pattern of “strong supply and weak demand” in the construction steel market. In the later period of construction steel prices, the decline in the fall may be the trend of the times.