In May, the domestic steel market did not ushered in the hope of stabilizing, but continued to continue the steel price trend in April, the overall performance is falling, falling. Moreover, under the suppression of low demand and high output, the decline in spot and futures has gradually enlarged, and there is a growing trend. Many regions are in a state of plunging. Steel mills have lowered their ex-factory prices in order to promote sales, traders have to lose money, withdraw funds, reduce inventory, and drastically kill. The market panic mentality has intensified, the pessimistic atmosphere has shrouded, the overall transaction has been light, and traders are expected to deteriorate further.
Data monitoring shows that as of May 31, the mainstream price of the 22*9 third-grade rebar market in Xicheng, Shanghai area was 3170 yuan/ton, down 310 yuan/ton from the same period of the previous month; the sunshine production 5.5*1500 carbon hot coil market The mainstream offer was 3,370 yuan / ton, down 320 yuan / ton over the same period of the previous month; WISCO's mainstream price of 1.0 * 1250 cold plate market was 4,440 yuan / ton, down 230 yuan / ton from the same period of the previous month. The major varieties fell across the board, and the decline was huge. At present, the signs that steel prices have stabilized and stabilized are not obvious, and there is still a tendency to continue to explore.
The author believes that the price decline in May mainly has the following factors:
First, the macro economy is sluggish, and steel demand falls below expectations.
Affected by weak investment and import and export, China's economic growth rate slowed down significantly in the first four months of 2013, far lower than previously expected; including real estate development, infrastructure, home appliances, automobiles and other manufacturing industries, railways, highways and other industries. Investment has further weakened; coupled with the sharp decline in China's export demand caused by weak global demand, the growth rate of raw materials such as steel has decreased significantly. The demand in the downstream industry is light, and the destocking speed of upstream steel is slowing down, which has caused the turnover of the steel spot market to remain in a downturn.
Second, crude steel has reached a new high, forcing steel supply pressure to increase
According to the data of China Steel Association, the daily output of crude steel of key enterprises in the middle of May was 1.741 million tons, down by 0.4% from the previous month. The national output of crude steel was estimated to be 2.185 million tons, down 0.3% from the previous month. Crude steel production declined slightly from the beginning of May, indicating that although the steel mills have reduced production, the progress is still slow. The reason is that the prices of metallurgical raw materials such as steel billets and iron ore continue to fall, the production costs of manufacturers are reduced, and the kinetic energy of active production reduction is weakened. It is estimated that the production cost of steel rebar at the end of May will be nearly 220 yuan/ton lower than that at the end of April.
Third, the steel trade market lacks confidence, and price cuts become mainstream.
Since the beginning of this year, the overall economy has been weak and the growth rate has declined. However, the macro-level policy stimulus has been insufficient, and it is expected that the country's large-scale economic stimulus measures will be difficult to introduce, and the focus will still be on rectifying backward production capacity and optimizing the industrial structure. The lack of policy stimulus has led to a serious lack of confidence in the steel market, and the pessimistic attitude towards the market has gradually increased. The main manifestation is that the willingness of agents to reduce goods is weak, the middlemen's trading is difficult to rise, the orders of buyers are decreasing, and most steel traders are accelerating shipments. In the usual price reduction, the main goal is to take out the inventory and go to inventory. In this way, the steel price is insufficient when it is overburdened, and the support collapses when it falls.
For the trend of steel market prices in June, we need to explore from the following three aspects:
1. In the hot season, the demand for recovery is hopeless. Although the data showed that the demand for terminal purchases increased slightly in May compared with that in April, the market did not respond to this because the increase in demand and growth rate were flat compared with supply, and it was difficult to effectively offset the increase in supply pressure. At the current stage, the overall macro economy is weak, and the demand for various steel industries is sluggish. For the upcoming June, affected by the hot weather, the terminal demand will definitely fall back. In addition, the government is unlikely to stimulate economic recovery with large investment, and steel demand in June will remain in a sluggish state.
2. The effect of steel mills' production reduction is insufficient, and the contradiction between supply and demand is difficult to ease. Recalling the trend of steel price declines in the past, steel mills have repeatedly repeated the "prisoner's dilemma" in which they are unwilling to take the initiative to cut production. The main reason is that steel prices have not fallen below their marginal cost. According to the current raw material cost calculation, the steel price has not fallen below its reasonable marginal cost, which will inevitably lead to slow progress in the steel mill's production reduction in the later period, and the effect is insufficient. Supply pressure is difficult to alleviate over a long period of time and will continue to weigh on steel prices.
3. The decline in raw material prices may slow down and gradually consolidate. After more than a month of continuous price declines, by the end of last week, the price of major iron and steel billets such as iron ore and billet has reached the lowest point in three years, perhaps not yet bottomed out, but steel mills have a certain degree after high-speed production. Replenishment requirements. Therefore, the pace of steel mill procurement will accelerate, and the raw material market will stabilize and enter a consolidation state.
In summary, the author believes that with the change of weather in June, the steel industry has entered a period of declining seasonal demand. Under the condition that the macroeconomic short-term speed increase is hopeless, the demand for terminal steel is difficult to be effectively released. At the same time, due to the fall in the price of raw materials, the output of steel mills is difficult to reduce, the contradiction between supply and demand remains, the market is difficult to change the weak pattern, or it will continue to operate in a volatile downturn.
Steel market in June: demand shrinks and falls more than