400 50

Steel prices ride on the "roller coaster" Some steel mills are showing signs of increasing production

Time:2024-06-13 00:00:00

Since mid-December last year, had fallen below the "cabbage price" of the steel market ushered in a wave of hot market.


Institutional data show that from mid-February to mid-March, the national average price of three-grade rebar rose from 1,985 yuan / ton to 2,502 yuan / ton, an increase of 26%. Especially since March, the rate of increase has increased, the speed of increase accelerated, three-level rebar single-day increase of 200 yuan / ton.


However, recently, steel prices are like a "roller coaster". March 9, the country's major cities steel prices have been sharply pulled back. Rebar, for example, the national average price fell 121 yuan / ton. And in the steel town of Tangshan, strip steel prices even fell 350 yuan a day.


Analyst Zhang Lin to the "Daily Economic News" reporter analysis, March weather is gradually warming, steel demand start, coupled with the current low social inventory, supply and demand imbalance has been eased, steel PMI data are also improving, so the overall trend of steel prices will continue, but may also be due to the rise of the trend of too fast to appear appropriate retracement.


Steel prices now big rise and fall market


Into March, the rising price trend seems to let the long winter steel saw the light. Tangshan area 150 plain carbon billet appeared five days cumulative rise of 360 yuan / ton, an increase of more than 20% of the trend. And if you count from the Spring Festival, 150 plain carbon steel billet rose even reached 580 yuan / ton, or 37%.


But on March 9, the steel prices sharply retracement for this wave of market "splash a pot of cold water". Billet prices on March 8, the highest for 2,260 yuan, but on March 9 fell to a minimum of 1,860 yuan, a day down 400 yuan. Beijing and Tianjin building materials prices fell from 2,400 yuan to about 2,200 yuan, Tianjin hot coil prices fell from a high offer of 2,700 yuan to 2,300 yuan, also reached 400 yuan.


The reporter noted that steel prices on March 10 were relatively stable, with a small upward adjustment in the prices of major steel mills in Tangshan.


The Daily Economic News reporter noted that, although the steel industry downturn, but in July and August last year, there was a wave of price rebound "small boom", but after the end of August steel prices again "diving". In this regard, industry insiders said, in the absence of fundamental changes in supply and demand contradictions, prices rose in July and August mainly because of the parade production restrictions, steel inventories have fallen.


So this round of steel prices is a repeat of last year's July and August or will the sustainability of the recovery? In this regard, Zhang Lin believes that it is necessary to insist on observing the subsequent growth in steel inventories and site work rates, up too fast, the local retracement is inevitable, of course, the appropriate retracement will help prices stand more stable.


Agency released a report showing that as of March 4, the national steel social inventory of 10,954,400 tons, down a quarter compared with the same period last year, has been at a low point in recent years. Analyst Xu Liying said that in recent years, a large number of steel traders to withdraw, the remaining traders in the background of the continuous decline in steel prices are gradually accustomed to low inventory operations, resulting in a sharp contraction of the overall social inventory of steel.


Price increase more need to prevent capacity rebound


In 2015, China's steel production capacity of 1.12 billion tons, crude steel production of 804 million tons, the capacity utilization rate of only 67%, the actual consumption of only 664 million tons, the surplus is prominent. Since last year, the top management has repeatedly shouted to speed up the steel industry to capacity.


On March 8, at the open day of the Hebei delegation, Hebei Governor Zhang Qingwei said the province plans to shut down 60 percent of its steel enterprises by 2020. He also said that by next year, Hebei will complete the reduction of 60 million tons of steel production capacity target.


However, along with the rise in steel prices, another layer of uncertainty has been added to the de-capacity. In the industry's view, rising steel prices - increase production - steel prices fall is a cycle. Despite the government's hard task of production capacity, but the temporary capacity shutdown may be resurrected when the market improves.


The reporter noted that the agency statistics of Tangshan 164 blast furnace effective start rate before the Spring Festival has fallen to 81.47%, while as of March 4, this figure rose to 85.04%.


"My steel network" survey data also shows that in March, the five major varieties of steel mills planned capacity utilization rate rose by 5.7% overall, of which building materials steel mills plan to increase average daily output of 17.68%, plate plans to increase average daily output of 1.44%.


In this year's National People's Congress, the National People's Congress, Handan vertical and horizontal steel group chairman Sun Jimu said, if not to go to capacity, the steel market is still serious supply exceeds demand, but also cause low competition, low price exports, the whole industry loss situation.


Zhang Lin said to the "Daily Economic News" reporter, the government's determination to go to production capacity is very strong, in the price rise more need to step up, especially the need to use environmental standards, legal means to prevent capacity rebound.