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2023
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03
The superposition of multiple factors affects the price of steel in a narrow range
Recently, the effect of economic stabilization policies has continued to appear, and the overall economic operation has shown a trend of stabilization and recovery. As steel consumption enters the peak season, market demand has rebounded. Last week, steel continued to go to the warehouse, and the prices of eight major varieties of steel maintained an upward trend. The supply side continued to recover, and the operating rate of blast furnaces and the output of hot metal per day continued to increase month-on-month. In terms of raw fuels, coke prices remained stable and scrap rose slightly. On the macro side, the central bank's decision to cut the reserve requirement ratio to boost market confidence has a certain supporting effect on steel prices, but the room for improvement is limited. Combined with the weakening of demand caused by foreign interest rate hikes and financial risk transmission, on the whole, steel prices in the short term are mainly volatile.
Iron and steel production
In early March, the China Iron and Steel Association focused on the average daily output of iron and steel enterprises, with crude steel of 2.1517 million tons, -3.08% month-on-month; pig iron was 1.92 million tons, -4.13% month-on-month; 2.0251 million tons of steel, -10.39% month-on-month. According to the output estimate of key statistics of iron and steel enterprises, the daily output of crude steel in the country in early March was 2.6219 million tons, -2.51% month-on-month; the daily iron production was 2.3602 million tons, -3.69% month-on-month; The daily output of steel was 3.6488 million tons, -5.51% month-on-month.
Deals & Inventory
Last week (the third week of March, March 13-March 17, the same below) the domestic steel market demand picked up significantly, steel prices continued to rise, steel companies increased production, destocking willingness is strong, steel market transactions are more active. The weekly average daily trading volume index of construction steel was 72.22, -6.13% month-on-month and +3.32% year-on-year. The social inventory of the five major varieties of steel and the inventory of steel mills were 15.5189 million tons and 6.0574 million tons respectively, -3.50% and -3.56% month-on-month, and -9.94% and -2.47% year-on-year. It is expected that this week, the steel transaction volume will maintain a slight fluctuation, and the steel social inventory and steel mill inventory will still maintain a downward trend.
Raw fuel prices
Coke, last week's coke prices remained stable, the average ex-factory price of first-class metallurgical coke was 2,730 yuan, the same as last week, a year-on-year increase of -22.16%, the first round of increase failed to land. The profits of coke enterprises are average, and the willingness to increase production is weak. With the arrival of the traditional consumption season, the steel market transaction is better, the profit situation of steel enterprises continues to improve, the demand for coke rises, and the coke steel continues to game. It is expected that this week, coke prices will be stable for the time being. Scrap steel, last week, domestic scrap prices rose first and then declined, with the average price of scrap steel per ton of steel above 6mm in 45 cities being 2775.6 yuan, +0.68% month-on-month and -13.70% year-on-year. Internationally, European scrap prices generally remained high, with Rotterdam +0.45% m/m and Turkey +0.68% m/m. U.S. scrap prices were +1.48% MoM. Based on factors such as the supply of scrap resources, steel market demand, and the European Central Bank's interest rate hike, it is expected that scrap prices will fluctuate in a narrow range this week.
Steel prices
Steel prices continued to rise slightly last week. According to the statistics of the China Iron and Steel Association, the average price per ton of steel of the eight major varieties was 4,723 yuan, +0.77% month-on-month and -12.33% year-on-year. From the perspective of steel varieties, galvanized sheet and cold-rolled sheet rose by 1.5% and 1.0% respectively, and other varieties rose within 1%. Recently, affected by the risk contagion factors of the foreign financial industry, the European Central Bank raised interest rates by 50 basis points, the Federal Reserve raised interest rate expectations, and the price of black futures fluctuated and fell. At the same time, China's central bank decided to cut the reserve requirement ratio by 0.25 percentage points, aiming to promote the economy to achieve effective qualitative improvement and reasonable quantitative growth. On the whole, steel prices have risen or slowed down after continuous increases. Steel prices are expected to fluctuate in a narrow range this week.
(Redirected from Metallurgical Industry Information Standards Research Institute)
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