Steel prices return to falling channel

Since September, steel prices have been a weak “background” overall. Strong supply and demand are weak. This is the crux of the current steel market, and the market imbalance continues. After a period of consolidation, steel prices reverted to falling channels.

According to the latest market report provided by the domestic well-known steel and information agency “My Steel”, domestic spot steel prices have fallen in the recent week, rebar prices have continued to be weak, crude steel production has remained at a high level, and the pace of downstream purchases has slowed down. Even if the merchants cut prices and shipped, the market's trading volume still looks a bit "dismal." The mentality of merchants in the steel spot market has gradually become pessimistic. The mainstream prices of major steel products have dropped, and the decline in some varieties has expanded.

According to analysis, in the plate market, the overall price fell. The prices of plate prices have dropped significantly. The weekly tonnage of tons of prices in most markets such as Shanghai, Guangzhou, and Beijing has dropped by 10 to 60 yuan, and the Chengdu market has fallen by 100 yuan per ton. According to people in the market, after a few days of testing, the “middle board market is still difficult to stabilize” and the transaction is not satisfactory. The pessimistic atmosphere in the market is relatively strong. The prices of hot-rolled coils also oscillated downward, and the decline was also expanding. With less goods coming from the downstream, the market continued to be sluggish, and transactions were poor. Even the number of calls for inquiry was rare.

In the construction steel market, prices have returned to weakness, and most markets in Shanghai, Beijing, and Tianjin have experienced weekly declines of between 10 and 50 yuan per ton. At present, the pace of procurement at the construction site is slowing. Even if steel prices are lowered, it is difficult to “change back” the trading volume. The dealer’s attitude tends to be pessimistic. Judging from the current situation, the “better expectation” of “Jinjiuyinshi” has basically been shattered. Merchants are returning their funds and “thinking” to ponder the method of shipping. However, the contradictory situation is: In the case of high cost of holding goods, price reduction and shipment means loss; no price reduction or shipment does not mean higher cost of goods. Businesses are in a dilemma.

The iron ore market that “is no longer beautiful” is always “repeated” from time to time. According to relevant reports, in the domestic ore market, the price of iron concentrate in Hebei remained stable, and the overall turnover of the mining market was light. The domestic mine inventory of steel mills remains low and purchases are not positive. The price of imported ore continues to rise. Platts' 62% grade iron ore index is 135 US dollars per ton and it is up 3 US dollars per week. At present, iron ore stocks in steel mills and ports are relatively low, and some steel mills' supplementation of deposits has driven the continuous rise in imported ore prices. However, the recent increase in shipments of the three major mines, and the sea freight billing up and down, may cause the shock of the short-term import price of iron ore to fall.

Analysts of relevant agencies believe that the pressure of supply is high, but the increase in downstream demand is insufficient, making domestic steel prices have been in a weak state since September. China Steel Association estimates that in the first half of October, the average daily output of crude steel in the country could reach 2,218,100 tons. Although it fell by 1.11% in the first half of the year, it was still at a high level, and the imbalance between supply and demand in the steel market continued. In the short term, the mismatch between supply and demand in the steel market remains difficult to ease, and steel prices will continue to be weak.