"Iron ore is skyrocketing", the pressure on steel supply is not too great, and manufacturers have a strong willingness to raise prices
"Iron ore is skyrocketing", the pressure on steel supply is not too great, and manufacturers are strongly willing to raise prices
On July 12, many places in southern my country experienced continuous heavy rainfall this week The weather has a great impact on the production and construction of regional steel plants. The short-term market is in a stalemate between supply and demand; restricted by relevant factors, dealers have no intention of chasing ups and downs, and there is little room for market price fluctuations.
At present, my country's steel spot market is in the traditional sales off-season, and demand is difficult to improve; while on the supply side, under the influence of environmental protection production restrictions and maintenance, the pace of steel plant production capacity release has "slowed down", and supply The pressure is not too great, and manufacturers have a strong willingness to raise prices - in the short term, the weak balance between supply and demand has not been broken.
In addition, although the skyrocketing trend of iron ore has been contained, it is difficult to make a significant correction in the short term. Coke and scrap steel have also shown a rebound trend, which means that cost support has not weakened. Based on this, we have a neutral evaluation of the market conditions next week (July 15-19) - blue warning. Specifically, the Nishimoto Steel Index will operate in the range of 4180-4250 yuan next week.
Nishimoto Steel Index
This week, Shanghai building materials prices fluctuated and consolidated. As of July 12, the Nishimoto Index was reported at 4220, down 10 from last weekend; during the same period, Shanghai’s high-quality grade three The representative specification of rebar was quoted at 3,980 yuan/ton, up 10 yuan from last weekend; while the representative specification of high-quality rebar in Shanghai was quoted at 4,240 yuan/ton, roughly the same as last weekend.
Shanghai rebar prices
According to market research feedback, the construction steel market prices in Shanghai this week (July 8-12) did not fluctuate greatly. Affected by the downward adjustment of Tangshan steel billets at the beginning of the week, the spot price loosened slightly. Later, driven by the shock of the snail futures, low-level resources moved up one after another. In the following days, the spot price mainly consolidated. Demand performance was poor. Shanghai experienced continuous rainy weather this week, downstream demand fell into a trough, and the overall transaction performance was weak.
However, with the official launch of a new round of environmental protection inspections, there are also certain restrictions on the supply side. The release of steel mill production capacity has slowed down, and the pressure on market arrival has eased. At present, the market is in a situation of declining supply and demand, and businesses have a wait-and-see attitude. Considering that the leading steel mills in East China have strong willingness to raise prices, and with cost support, short-term prices still have a certain resistance to falling, so Shencheng Building Materials may mainly fluctuate and consolidate next week.
National market
According to transaction data monitored by Nishimoto Shinkansen, the price of steel for building materials fluctuated and fell in some regions across the country this week, with varying amplitudes. Prices fell slightly in many places at the beginning of the week. On Tuesday, snail prices rose strongly, driving bullish sentiment in the market. Prices of building materials in various places rebounded. In the second half of the week, domestic building materials were basically volatile and weak. Specifically, look at the performance of various regions:
Beijing market: This week, the spot price in the Beijing market first fell and then rose, with slight fluctuations. The overall price dropped slightly by 20-30 yuan/ton compared with last weekend. The current price of Hebei Steel HPB300Ф8-10mm high thread is 4780-4800 yuan/ton; HRB400EФ12-Ф14mm small thread is 4070-4140 yuan/ton, HRB400EФ16mm thread is about 4060 yuan/ton, HRB400EФ18-25mm large thread is 3890-3910 yuan/ton; HRB400 Ф8 -10mm snails are quoted at 4300-4320 yuan/ton.
Affected by sluggish demand and lower-than-expected production limits at the Tangshan Steel Plant at the beginning of this week, the market mentality in Beijing was not good. Some middlemen were eager to take profits and significantly lowered their quotations by 50-60 yuan/ton for shipments. Subsequently, the snail futures and Tangshan steel billets rebounded, the market sentiment gradually stabilized, and terminals were active in taking goods; middlemen entered the market again to lock goods, and the market price quickly rebounded by 30-50 yuan/ton and then mainly fluctuated and consolidated. Taking into account that the current terminal demand has entered the off-season, the production limit of Tangshan Steel Plant is lower than expected, but the steel price and cost support are strong. It is expected that the Beijing market will continue to fluctuate and consolidate next week.
Hangzhou market: The steel market in Hangzhou this week mainly fluctuated within a narrow range. Currently, the mainstream quotation of Shagang 16-25mm rebar in the Hangzhou market is 4,050 yuan/ton, with Yonggang, Zhongtian, Xinxing, and Shente being the same. Specification resources are 4020-4050 yuan/ton; the price of coiled screws and wire rods from Yonggang, Zhongtian, Pinggang and other companies is 4260 yuan/ton; the price of qualified threads is 3920-4010 yuan/ton, and the price of wire rods and coiled screws is about 4190 yuan/ton. .
From July 8th to July 12th, there was too much rain in Hangzhou this week, making it difficult to carry out outdoor construction. The overall market transactions were deviated, and inventory continued to accumulate. However, the main contract of snail futures fluctuates around 4,000 points, the price policy of surrounding steel mills is relatively firm, and the northern environmental protection production limit is high pressure, so most merchants are unwilling to sell at low prices.
This Thursday, Shagang announced its price policy for mid-July. The prices of threads and wire reels will remain unchanged, and there will be no make-up for the previous period. Some agents have the fantasy to make up the difference of 30-40 yuan/ton. Failed, the market price showed a sideways trend. It is expected that the Hangzhou market will still mainly fluctuate within a narrow range next week.
Guangzhou market: Building materials prices in the Guangzhou market consolidated within a narrow range this week. Currently, the mainstream quotation of rebar Shaogang Ф18-25mm HRB400E specification resources is 4190 yuan/ton, and the quotation of Guangzhou Iron and Steel, Cold Steel, Yufeng, Yue Steel, and Xiangtan Iron and Steel HRB400E Ф18-25mm specification resources is 4140-4190 yuan/ton; Shaogang HPB300Ф6- The mainstream price of 10mm high wire is 4330-4380 yuan/ton; the price of high wire of the same specifications in Guangzhou Iron and Steel, Zhuhai Yue Steel and Xiangtan Steel is 4220-4300 yuan/ton. Xiangshan Iron and Steel Co., Ltd. and Pingshan Iron and Steel Co., Ltd. offer Ф8-10mm HRB400 snails at 4400-4410 yuan/ton.
According to market feedback, affected by the wide range of snail prices and price fluctuations in external markets this week, the local market prices have generally fluctuated. In terms of inventory, the total inventory of sample warehouses in Guangzhou this week was approximately 1.0744 million tons, a slight decrease of 5,000 tons from the previous period and an increase of 274,500 tons from the same period last year. Among them, rebar inventory is 662,200 tons, a decrease of 19,000 tons from the previous week; wire reel inventory is 412,200 tons, an increase of 14,000 tons from the previous week.
According to interviews, due to the slowdown in downstream purchases this week, the outbound speed has weakened, the decline in thread inventory has narrowed, and the wire reel inventory has maintained an upward trend. Taken together, at present, the local market is still in a weak situation of supply and demand. With the weather affecting demand, the price increase lacks support. It is expected that the market price in Guangzhou will weaken next week.
Steel mills adjust prices this week
From July 8th to July 12th, the ex-factory prices of domestic building materials did not change much this week. Among them, the leading steel mills in East China basically kept the same price as the previous period. According to calculation Arrival costs, agents are still in an upside down state. At present, steel mills have a strong willingness to raise prices, which will provide certain support for spot prices in the short term. However, it was mid-July, and the off-season effect was still there, making it difficult to amplify market demand. In order to speed up the withdrawal of funds, some manufacturers adopted flexible pricing for shipments.
Raw materials
Domestic raw material prices have been mixed this week. Steel billet and iron concentrate prices have increased slightly. Coke prices have continued to fall, while scrap steel prices have been basically stable. In terms of types:
Steel billet market: Domestic steel billet prices fluctuated upward this week. Recently, Hebei Province has carried out centralized control of air pollution. Qualified steel companies in Tangshan, Handan, Shijiazhuang, Xingtai and other municipal areas strive to complete ultra-low emission transformation by the end of September. Some steel billet production and billet rolling companies have suspended production for maintenance. Supply and demand are relatively tight.
From a price point of view, from Monday to Tuesday this week, black commodity futures collectively fluctuated higher, market confidence was enhanced, and steel billet quotations continued to rise slightly. In the second half of the week, steel billet quotations experienced tentative rises and falls, with a limited range. At present, steel billet inventories continue to decline, and dealers are mainly waiting and watching. It is expected that the domestic steel billet market will fluctuate within a narrow range next week.
Coke market: Coke prices continued to fall this week, but the decline narrowed. Recently, environmental inspections have been frequent in Shanxi. The start of construction of coke enterprises has declined slightly compared with last week. The follow-up environmental protection expectations are still strong, and no specific policies have been introduced yet. The enthusiasm of traders to receive goods has increased compared with the previous period. The recent shipments of coke enterprises are in good condition. Overall Inventories are slightly reduced. Coke inventories in steel mills are at mid-to-high levels. With the recovery of steel profits, steel mills' willingness to suppress raw materials has weakened, and a few coke companies also intend to raise prices. It is expected that the domestic coke market may rebound with shock next week.
Scrap steel market: Scrap steel prices moved sideways this week. After a sharp rise in the domestic scrap steel market in the early stage, the market has tended to consolidate at a high level. Steel companies in various places have seen mixed purchasing prices depending on their own inventory conditions.
Among them, due to the impact of production restrictions in North China, the scrap usage of steel companies has increased, and the scrap price has mainly increased, with an increase of 20-50 yuan/ton; in East China, it has mainly remained stable after rising, and mainstream steel companies Things are getting better upon arrival. Affected by the sharp correction in steel prices in central and northwest China, high scrap steel prices have been under pressure, and the purchase prices of steel companies have slightly adjusted back by 20-40 yuan/ton.
At present, domestic steel prices are unstable, and scrap steel traders are cautious and mainly focus on fast in and fast out. Considering that the current scrap steel supply is still tight, but the scrap steel price is at a high level during the year, and the profits of steel companies are limited, it is expected that the domestic scrap steel market will mainly fluctuate at a high level next week.
Iron ore market: Prices in major domestic ore-producing areas rose slightly this week. At present, the price of imported ore remains high and difficult to come down. Some steel mills are replenishing their stocks as needed. Most miners have a good attitude and the market quotations have increased slightly. Prices in the imported ore market first rose and then fell this week.
Specifically, in the first half of the week, due to Tangshan's production restriction being less than expected, the ore futures market rose, and the spot price also rose; in the second half of the week, due to the correction in the futures market, some miners were cautious in their operations, and the spot quotations increased again. Stop rising and fall back. On the whole, imported ore shipments have increased, port inventory declines have slowed, and there are more rainy weather in the south. It is expected that the imported ore market will be volatile and weak next week.
Shipping market: On July 11, the Baltic Dry Bulk Index (BDI) closed at 1,816 points, up 116 points or 6.8% from the same period last week. On July 5, the China Coastal (Bulk Cargo) Comprehensive Freight Index released by the Shanghai Shipping Exchange closed at 981.31 points, down 4.6% from June 28.
On July 11, the freight rate index for coal cargo released by the Shanghai Shipping Exchange closed at 549.9 points; the freight rate for the Qinhuangdao-Shanghai (40,000-50,000 dwt) route was 18.7 yuan/ton, which was higher than 7 On July 10, it increased by 0.3 yuan/ton; the freight rate of Qinhuangdao-Guangzhou (60,000-70,000 dwt) route was 26.1 yuan/ton, an increase of 1 yuan/ton from July 10. On July 9, the coastal metal ore cargo freight index closed at 643.94 points, down 10.97 points from the previous period. It is expected that the BDI index will fluctuate at a high level next week.
Supply and demand analysis
Data tracked by the Nishimoto Shinkansen trading platform shows that due to the continuous rainy weather, Shanghai building materials transactions did not increase this week. Specifically: at the beginning of the week, during the period Affected by the downward shock of snails and steel billets, the mentality of merchants was weak, and the market trading atmosphere was very light; on Tuesday, the snail futures rebounded in shock, the mentality of merchants improved, and the transactions of some low-level resources picked up, but the total volume was still small; in the second half of the week, Shen Shen It rained continuously in the city, with heavy rainfall in some areas. Downstream construction was blocked and transactions fell into a trough. Overall, the off-season effect is more obvious, and short-term demand is difficult to amplify. If the weather clears up next week, terminal demand may pick up.
From the inventory situation, the rebar inventory in Shanghai this week was 324,500 tons, a week-on-week decrease of 6,400 tons; from the national inventory statistics, the rebar inventory in major cities across the country increased by 36,500 tons week-on-week. , wire rod inventories increased by 65,700 tons week-on-week; rebar inventories at major steel mills across the country increased by 98,000 tons week-on-week, and wire rod inventories increased by 52,700 tons week-on-week.
According to monitoring, my country's steel social inventory and steel mill inventory both increased this week. It can be seen that under the influence of the off-season demand, inventory pressure is increasing day by day. However, it is worth noting that the output of domestic steel mills is likely to decline this week, indicating that the effects of production restrictions and maintenance will gradually appear; while the number of domestic steel mills undergoing maintenance has increased in mid-July, supply pressure may be reduced to a certain extent in the future, and the market is expected to From strong supply and weak demand to a pattern of weak supply and demand.
Comprehensive perspective
From July 8th to 12th, many places in southern my country will experience continuous heavy rainfall this week, which will bring serious consequences to the steel production and engineering construction of regional steel plants. The short-term market is in a stalemate between supply and demand; subject to certain constraints from relevant factors, steel dealers have no intention of chasing ups and downs, leaving little room for market price fluctuations.
At present, the national steel spot market is in the traditional sales off-season, and it is difficult to improve in terms of demand; while on the supply side, under the influence of environmental protection production restrictions and maintenance, the pace of steel mill production capacity release has slowed down, and steel supply pressure It’s not too big, and manufacturers have a strong willingness to “raise prices” – in the short term, the weak balance between supply and demand has not been broken.
In addition, although the skyrocketing trend of iron ore has been contained, it is difficult to make a significant correction in the short term. Coke and scrap steel have also shown a rebound trend, which means that cost support has not weakened. Based on this, we hold a neutral evaluation of the market situation next week - blue warning. Specifically, the Nishimoto Steel Index will operate in the range of 4180-4250 yuan next week (July 15-19).