Here are the details:
1. Macro
Manufacturing supply and demand were weak in October, with electricity supplies still tight and prices for some raw materials rising at a high level. The real estate prosperity degree is on the low side, the infrastructure investment is expected to launch vigorously, the construction industry overall expansion slows down. At present, the steel industry has shifted from capacity reduction to double-control of capacity and output in the new stage, and the lower the environmental performance rating, the higher the proportion of staggered production in heating season. The state has severely investigated and dealt with illegal and illegal activities in the coal market, and the situation of coal supply and demand has markedly improved.
The situation of each kind of raw materials
1. Iron Ore
Iron ore prices continued to fall, driven by the widening gap between supply and demand and the recent drop in black prices. The three major varieties of premium performance, pellet ore is stronger than lump ore, stronger than powder ore, the 65 per cent pellet premium has reached a three-year high on the back of Supply and demand fundamentals. China’s 45 port stocks continue to break new records. The centralized supply of port arrivals and port reductions has left room for accumulation of port stocks. The price of iron ore has continued to fall in comparison with port stocks at the same level in history, the possibility of releasing risk.
(2) Coal Coke
(3) scrap
From the view of scrap difference, the price of scrap is still lower than the cost of Molten Iron; from the view of screw scrap difference and plate scrap difference, the current profit of steel mills is OK, there is still demand for scrap. But in the near future, the power limit of steel mills has remained relatively strong, the demand for scrap steel has remained weak, while waste and processing enterprises are also affected, the overall market is in a weak pattern of both supply and demand. In view of the weak operation of related varieties, scrap market prices are expected to remain weak this week.
(4) billet
Affected by the futures market, this week billet prices fell in resonance. Current billet costs high, with the price of a sharp decline, falling below the cost of steel mill line, billet was forced to implement the insured price. From the perspective of expectation, the Environmental Protection in Tangshan area has been tightened, and the delivery of steel billets has been reduced again, while the downstream steel rolling enterprises are expected to resume production in the short term. However, from the current situation of low profit on steel rolling and transaction obstruction, the enthusiasm for resuming production may be greatly reduced, if there are no special circumstances, billet factory prices again to reduce the possibility of small, the price of the 4900 level. In the current cost suppression, downstream demand weak state, once a rebound opportunity, billet prices will respond quickly, focusing on policy and downstream resumption of production, turnover.
Situation of various steel products
(1) construction steel
At present, the market as a whole is in a double-weak pattern of supply and demand. Consumption has dropped sharply from the same period last year and the recent recovery rate is far less than expected. However, the spot price of rebar has fallen to near the cost, and before the cost of steel works has not shown an effective decline, costs will provide some support to spot prices. Domestic spot prices are expected to remain weak this week.
(2) medium and heavy plates
Looking back on the domestic plate market last week, the overall situation continues to decline, in the short term, the main concern is the following factors: supply-side, last week the national plate output has rebounded, but the number of steel mills currently under repair is still relatively large, short-term recovery is less likely, is expected in mid-november supply side will be significantly repaired; circulation links, spot rapid decline, steel orders to ensure that the fall is more active. From the inventory point of view, the effect of reducing production and storage is very obvious, some regional resources have been scarce; on the demand side, the recent price adjustment is too fast, inhibiting some of the terminal procurement, if this week the disk stop falling repair, trading is expected to improve. Integrated expectations, this week, the bottom of the plate price shocks, there is little room for recovery.
(3) cold and Hot Rolling
From the point of view of supply, there is a concentrated resumption of steel production in the near future, production has shown a clear pick-up trend, especially the cold-rolled Capacity utilization up 6.62% month-on-month;
From the perspective of demand, on the one hand, most steel mills say that receiving orders has certain pressure, especially from the circulation end. From the feedback from the market, due to the high order cost of traders, resource digestion has slowed down significantly compared to the normal level, the pressure of capital flow has been relatively high, so although the Social Treasury is in a state of destocking, the pressure of the factory Treasury has increased to a certain extent. On the other hand, the purchasing enthusiasm of the market in the recent period has generally performed, especially after the price has dropped, and the market wait-and-see sentiment is strong, hot and cold rolling turnover Chow ring showed a decline in the situation (- 4.8% ,-5.2%) supply and demand pressure increased.
From the point of view of market mentality, in the context of the decline in the environment, traders are more willing to cut prices to the warehouse, but also hope to reduce the settlement price of steel mills to a certain extent, so as to ease the pressure on their own costs.
On the whole, short-term mainly by the psychological fluctuations of the market pessimism, and in the face of supply and demand fundamentals of the small pressure is expected to continue this week, cold-rolled spot prices volatile weak operation.
(4) stainless steel
Since September, due to the strengthening of dual control of energy consumption, stainless steel production under pressure, adding some raw materials prices rose, further cost increases under the spot price rise wave. With the relaxation of power rationing in November, the supply of steel mills may increase, but current downstream demand is weak, last week 300 series of social inventory has been a sign of a barrier, this week 304 spot price volatility is expected to run weak.
Post time: Nov-02-2021