Steel prices still have room for a phased rebound
Against the backdrop of low fundamental pressure on supply and demand, the rebound in raw and fuel prices will drive up steel costs.Affected by this, steel prices still have room for a phased rebound, steel inventories still have room for decline, and specific product trends and regional market trends will diverge.
A leading indicator for observing demand is BDI. As of November 24, the BDI reached 2102 points, an increase of 15% compared with the previous week, close to the highest level in recent years (the highest reached 2105 points on October 18 this year). At the same time, China's coastal bulk freight index rose from a low of 951.65 points on October 13 this year to a level of 1037.8 points on November 24, which shows that the coastal bulk transportation situation has improved.
Judging from China's export container freight index, since late October this year, the index has bottomed out and rebounded to 876.74 points. This shows that overseas demand maintains a certain partial recovery trend, which is conducive to exports in the near future. Judging from China's imported container freight index, the index has only begun to rebound in the past week, which shows that domestic demand is still weak.
Entering December, rising steel costs may be the main factor that continues to push up steel prices. As of November 24, the average price of 62% iron ore powder increased by US$11/ton from the previous month, and the comprehensive price of coke increased by more than 100 yuan/ton. Judging from these two items alone, the cost per ton of steel for steel companies in December generally increased by 150 yuan to 200 yuan.
Overall, with the improvement in sentiment brought about by the gradual implementation of favorable policies, there is little pressure on supply and demand fundamentals. Although the steel market will be adjusted in December, there is still room for passing on costs.
Steel companies with profits or marginal contributions are actively producing, can adjust prices appropriately, and actively sell; traders should gradually reduce inventories and wait patiently for opportunities; terminal companies should also reduce inventories appropriately to prevent the contradiction between supply and demand from intensifying.
The market is expected to experience high levels of volatility
Looking back on November, under the influence of multiple factors such as strong macroeconomic expectations, increased production cuts by steel companies, release of rush work demands, and strong cost support, the steel market showed a volatile upward trend.
Data show that as of the end of November, the national comprehensive steel price was 4,250 yuan/ton, an increase of 168 yuan/ton from the end of October, an increase of 4.1%, and a year-on-year increase of 2.1%. Among them, the price of long products is 4,125 RMB/ton, an increase of 204 RMB/ton from the end of October, an increase of 5.2%, an increase of 2.7% year-on-year; the price of flat bar is 4,325 RMB/ton, an increase of 152 RMB/ton from the end of October, an increase of 3.6 %, a year-on-year increase of 3.2%; the profile steel price was 4,156 RMB/ton, an increase of 158 RMBan/ton from the end of October, an increase of 3.9%, a year-on-year decrease of 0.7%; the steel pipe price was 4,592 RMB/ton, an increase of 75 RMB/ton from the end of October , an increase of 1.7%, a year-on-year decrease of 3.6%.
In terms of categories, the average market prices of the top ten mainstream steel products show that as of the end of November, except for the price of seamless steel pipes, which fell slightly compared with the end of October, the average prices of other categories have increased compared with the end of October. Among them, the prices of Grade III rebar and mild steel plates increased the most, rising by 190 rmb/ton from the end of October; the price increases of high-end wire, hot rolled steel coils, welded pipes, and H beam steel were in the middle, rising by 108 rmb/ton to 170 rmb/ton from the end of October. The price of cold rolled steel coils increased the least, rising by 61 rmb/ ton from the end of October.
Entering December, from the perspective of the foreign environment, the external environment is still complex and severe. The global manufacturing PMI has fallen back in the contraction range. The unstable characteristics of the global economic recovery have emerged. Continued inflationary pressure and intensified geopolitical conflicts will continue to plague the economy. Global economic recovery. From the perspective of the domestic environment, the domestic economy is generally operating stably, but demand is still insufficient, and the foundation for economic recovery still needs to be consolidated.
From "China Metallurgical News"
Post time: Dec-07-2023