Steel Market Overview for the Week (08.29-09.02)

This week, the domestic steel price increase slowed down, among which long products continued to undergo weak consolidation and flat steel products remained strong. The domestic and foreign negative atmosphere dominated. International: The IMF said on Monday that the agency has lowered the economic growth expectation of the United States and the euro area countries this and next year and the global economy is in a new crisis; the Indian economy increased by 7.7% in the second quarter and inflationary pressures have not decreased; India may again raise iron ore Export tax rate, ore prices are easy to rise and fall; Trichet hinted that the suspension of interest rate increases, the euro area bailout will shift to banks; overseas stock market is difficult to change shocks, low turnover forecast bouncing rebound; imported car manufacturers began to penetrate the second and third tier markets; Fed QE3 hesitant Indefinitely, the U.S. dollar is waiting to be non-agricultural; Obama is planning to push the "Millions of Jobs" plan to boost the economy; Japan's economic data is collectively cold. Domestic side: China's economic slowdown did not exceed expectations, and the orientation of control cannot be changed; the market predicts that the increase in CPI in August will fall year-on-year, and the probability of raising interest rates in September will decrease; platform loans and development loans will eventually become “naked”, and overdue loans to 12 listed banks will surge. The semi-annual report of the iron and steel industry made its debut; steel companies experienced a trivial period of “three-fold”; Baosteel used the Platts Index to purchase ore based on quarterly pricing; 4 Large home appliances sold nearly 100 billion yuan in the first half of the year; steel stocks broke through a large area and the brokers considered Or oversold bounce; China's financial market concussed consolidation.

On September 1, the Myspic Composite Index was 177.0 points, down 0.13% on a week-on-week basis; the flat steel index was 153.6 points, up 0.05% on a week-to-week basis; the long products index was 202.8 points, down 0.18% on a week-to-week basis.

Construction steel: Construction steel in the domestic market faltered this week. From the perspective of local conditions, prices in eastern China fell by 30-40 yuan/ton; in Central China, they dropped by 20 to 30 yuan/ton; in southern China, they dropped by 20 to 40 yuan/ton; in the southwest, they dropped by 10 to 30 yuan/ton; in North China It fell by 10 yuan/ton; in the Northeast, it dropped by 30-50 yuan/ton; in the northwest, it dropped by 20 to 30 yuan/ton. The lack of market demand this week has relatively unfavorable impact on the spot market, but the current steel price decline has been significantly tightened. On the one hand, due to the continuous reduction of the current market resources, on the other hand, the advent of the traditional peak season also makes dealers full of expectations. The price space is relatively limited. However, the prudent policy orientation of the steel mills in early September has psychologically affected the market’s expected confidence. Based on the bleak status of recent transactions, steel prices are still operating steadily. Looking at the futures market, the 1201 contract of the main screw of this period was confined within a narrow range. As of press time, it closed at 4829 yuan/ton, up by 13 yuan/ton from the previous week. As of Thursday, the average price of 20mmHRB335-threaded 25 cities nationwide was 5,012 yuan/ton, down 18 yuan/ton from the previous week; the average price of 20mmHRB400-threaded 25 cities nationwide was 4,994 yuan/ton, down by 20 yuan/ton from the previous week. The average price of the 6.5mmQ235 high-line 24 major cities across the country was 5,094 yuan/ton, down 13 yuan/ton from the previous week.

Hot rolled coils: The domestic hot rolled coil market prices continued to show a slight decline this week. Specific to the price, as of press time, the national average price of 3.0mm hot-rolled coils was 4,939 yuan/ton, down 3 yuan/ton from the same period last week (August 25, 4942 yuan/ton); 4.75mm hot-rolled sheet The average national price of the volume was 4,874 yuan/ton, which was 3 yuan/ton lower than the same period last week (4,877 yuan/ton on August 25). This week's market transactions continued to show a downturn. Downstream procurement demand continued to be sluggish for the time being. Although the external market performance this week was relatively stable, the domestic market was constrained by the expansion of the deposit reserve payment scope, and the market capital funds were tightening. The electronic trading system generally showed a narrow range of fluctuations. Affected by this, businesses have become more and more watchful and the demand in the middle of the market has continued to slump. In terms of electronic trading, as of today, the electronic 1111 contract closed at 4,808 yuan/ton, a slight increase of 5 yuan/ton from the same period last week (August 25, 4803 yuan/ton). As for the steel mills, subject to the downturn in downstream demand, the recent market prices have dropped to a certain degree. The hot rolling price policies of steel mills such as Bengang, Rizhao, and Ningsteel have basically been flat and reduced. The recent hot rolling market conditions are not very optimistic, and the steel mills have introduced a price policy that is relatively ambiguous. Before the press release, Shagang's September hot rolling price policy has not yet been officially issued. Has entered the "Golden September", it seems that there is still no sign of recovery in downstream demand. However, the market currently has factors such as relatively low inventory levels, high raw material prices, and the fact that some hot-rolled mills in September have affected production due to overhaul and other factors have solidly supported steel prices. It is expected that the hot-rolling market price will continue to be narrow next week. Consolidate.

Cold-rolled coils: This week domestic cold-rolled coils remained strong, with some gains, and the overall turnover was sluggish. It is understood that the current shortage of cold rolling resources in China has still not been resolved, such as certain specifications of Wuhan Iron and Steel cold plate, Maanshan cold plate and other specifications resources are tight, individual specifications out of stock; Shougang, Tangshan Iron and Steel, Shao Steel cold rolling resources less This is also the key reason why the prices of cold rolled coils have remained strong recently. The reasons for the recent tight supply of cold rolling resources are twofold. On the one hand, the pre-cold rolling market has continued to be sluggish, and the profit margin for cold rolling has been greatly reduced. The steel mills' enthusiasm for production has been low, and they have been reduced; on the other hand, it is subject to domestic cold rolling. The slowdown in demand and the large price difference between cold rolling at home and abroad have prompted some steel companies to actively request foreign markets. It is reported that in August, Hegang received a contract for exporting 14,000 tons of cold-rolled steel sheets and all exported to India. The author believes that the short-term cold rolling market still has the following support: First, the domestic cold rolling market supply and demand match better, tight cold rolling resources will continue for some time; Second, raw material prices rose steadily, the bottom of cold rolled coil Steady and stronger cost support; Thirdly, the market is expected to be strong for “Jin 9 Silver and 10”; Fourthly, downstream demand for automobiles and home appliances will slowly pick up. It is expected that the cold rolling market will continue to operate at a high level in the next week, and it is not ruled out that the resources of individual steel mills may continue to climb. As of Thursday, the average price of 1.0mm national cold-rolled coils was 5,525 yuan/ton, which was 17 yuan/ton higher than last week.

Plate: Domestic plate prices have been slightly adjusted this week. In terms of the market, the recent market prices have changed little, the volume has declined, the national mid-plate inventory continues to decline, and some parts of the market appear to be out of stock, which has inhibited the amplification of trading volume to a certain extent, and the business mentality is mostly stable. In terms of inventory, the latest caliber of medium-sized board stocks in the country was 1,476,980 tons, a decrease of 15,380,000 tons from the previous quarter. Current inventory increased by about 30,000 tons compared with the same period of last year, and maintained a downward trend compared to the same period of last year; Shanghai's latest stock of medium-sized board in the same size is 37.840. Ten thousand tons, a decrease of 0.215 million tons. For steel mills, Maanshan Iron & Steel’s pre-tax price was increased by RMB 30/t in early September. Huai’s and Yicheng’s prices for billet-rolled steel mills in East China were basically the same as prices at the end of September. Mainstream price guidance prices Maintained at 4980-4990 yuan / ton. In mid-September, the prices of steel plate in mid-table were mostly stable, which played a supporting role for spot prices. Although the market turnover remained low, the market-selling resources were low, some of the specifications were out of stock, and the market lacked key factors that led to the ups and downs. It is expected that the mid-table market price will remain within a narrow range of fluctuations next week. As of Thursday's close, the mainstream market price of Shanghai Maanshan Iron & Steel Co., Ltd. is RMB 4870/ton for low prices and RMB 5,100/ton for low-alloy resources, which was unchanged from last week. Judging from the average price of 23 cities across the country, the 8mm plate price is 5223 yuan/ton, which is 7 yuan/ton lower than last week; the average price of 20mm common plate is 4921 yuan/ton, which is 6 yuan lower than last week. / Ton; The average price of 20mm low alloy sheet is RMB 5,095/ton, which is RMB 5/ton lower than last week.

Profiles: The price of the domestic profile market oscillated this week. This week, Rizhao, Laiwu Steel, and Maanshan Iron & Steel announced their new ex-factory prices, respectively, with Rizhao cutting 110 yuan/ton for labor tanks, Laiwu Steel at parity, and Maanshan Steel being increased by 50 yuan/ton. From the different price adjustment policies of steel mills, it can be seen that the current profile market is quite different. Some mainstream steel mills have been pressured by rising iron ore prices and have chosen to increase their quotation and transfer this part of the cost to traders. However, due to the “buoyant season” that has been so dull this year, traders or terminals are more likely to choose to wait and see for the domestic domestic profile market, making the recent market demand very deserted. In this case, some of the profiled steel mills elected to offer flat or downcut quotes to stimulate traders to get goods, but even so, according to the author's understanding that the current shipments of steel mills in some regions are slightly less than the purchase volume of terminals, traders are By reducing inventory control risks. As of Thursday, the average price of 23 major markets nationwide: 25# I-beam was 4,987 yuan/ton, which was 6 yuan/ton higher than last week, and 5# angled steel 4885 yuan/ton, which was higher than last week. 5 yuan / ton, 16 # channel nationwide average price of 4866 yuan / ton, compared with last week rose 5 yuan / ton.

To sum up, domestic steel prices fluctuated slightly this week, among which the long products performance was weak, and the performance of sheet steel, especially cold rolling, was relatively strong. The overall turnover of the market continued to decline, and the business mentality was relatively stable. From the perspective of cost, domestic cold-rolling cost support is relatively strong: on the one hand, the prices of raw materials such as ore and coking coal continue to rise; on the other hand, corporate capital costs, labor costs, logistics costs, etc. have increased to a greater extent. From the perspective of supply and demand, domestic building materials stocks continue to rise this week, and the increase in sheet metal types is not obvious. In particular, the matching of supply and demand for cold rolling resources is relatively good. In addition, the market is full of confidence and expectations for the "Golden September". Therefore, in the short term, domestic steel prices still have strong support, and they are expected to remain at a high level of consolidation next week. The trends of various varieties may be different.

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