Heavy rain effect: construction steel prices fell

Including the steel spot trading platform Nishijin Shinkansen and the steel information agency My Steel, a number of institutions released the latest market report, saying that recent heavy rains in many parts of the country have exposed the off-season characteristics of the steel market. Domestic steel prices The decline has an upward trend.

Xie Yuecheng, a senior analyst at the Nisshin Shinkansen, analyzed that the continued rain weather in the south of June had a significant impact on the release of terminal demand.

According to “My Steel” monitoring, spot steel prices fell sharply for several consecutive days due to the tumbling price of billets in Tangshan and the decline in the forward price of steel in the market early last week. Near the end of last week, the market's decline began to narrow, and some regions began to see signs of stability. Businesses report that the fundamental reason for the decline of the steel market is the continued sluggish demand. “Only by the effects of the continuous heavy rain conditions in East China and South China, the negative factors of the market have become more concentrated.”

Domestic construction steel prices have generally fallen sharply.

“At present, the capacity release of steel mills continues to be at a high level. In July and August, it is a traditional off-season consumption period. The road to building steel stockpiles will continue to be tortuous,” said Qiu Yuecheng.

As far as the Shanghai area is concerned, the Nishimoto Shinkansen said that in the following July, Shanghai will usher in a hot summer season, and demand for end-users will continue to weaken. Affected by the regulation of the property market, from January to May, the sales area of ​​commercial housing in Shanghai dropped by 19.1% year-on-year, and the inventory of residential buildings is increasing. The developer’s sales pressure is increasing and the funds are generally tight, which may drag down the growth rate of real estate investment. Steel sales will remain low.

On the sheet side, Liu Guosheng, vice chairman of Baosteel Group Co., Ltd., said on the 24th that due to the decline in domestic auto sales, the auto board market is not optimistic and orders are decreasing. Based on this, Baosteel (600019) has lowered the ex-factory price in July.

An executive from Xinyu Iron & Steel Co., Ltd. (600782, Xinshan Iron & Steel Co., Ltd. (600782)) stated that the cost of raw materials such as iron ore “has remained high,” and that many steel companies are hard to make even small profits.

It is worth mentioning that on the previous 23rd, Rio Tinto's offer for iron ore in the third quarter announced by Chinese steel companies declined slightly. Qiu Yuecheng analyzed that the release of domestic mine output was accelerating, coupled with the low rate of crude steel production release in Europe and the United States, and weak demand for iron ore. There was still some room for decline in iron ore prices in the later period.