15 March 2021 China Steel Price Forecast & Analysis
Steel Rebar: On March 12, the average price of 20mm grade 3 rebar in 25 major cities across the country was 4,738 yuan/ton, an increase of 18 yuan/ton on a week-on-week basis. In terms of building materials, short-process production is basically saturated, and the increase or decrease in supply in the later period mainly depends on blast furnace enterprises. In the short term, the weekly supply level of rebar is maintained at about 3.5 million tons. Although the current terminal resumption rate is gradually increasing, higher costs have caused a slowdown in terminal purchase orders, and the phenomenon of concentrated and large volumes has slowed down. The business mentality is more cautious and fear of heights coexist. On the whole, the price of construction steel is expected to fluctuate at a high level this week.
Hot-rolled coils: On March 12, the average price of 4.75mm hot-rolled coils in 24 major cities across the country was 4,968 yuan/ton, an increase of 78 yuan/ton on a week-on-week basis. Merchants have recently followed the market to follow the market price adjustment, and the profit orders have the willingness to continue to cash out, and the positive slips are also working hard to cash out. Judging the price this week, downstream purchases will be gradually taken when the price is right, so the price high and low points will be suppressed. It is expected that the hot coil spot price this week may remain volatile.
Cold rolled coil: On March 12, the average price of 1.0mm cold coil in 24 major cities across the country was 5,691 yuan/ton, an increase of 25 yuan/ton on a week-on-week basis. From the supply side, the weekly output of cold rolling was flat month-on-month, the month-on-month ratio of factories and warehouses increased significantly, and the month-on-month ratio of social warehouses was basically the same. In April, steel mill futures prices mainly rose in a narrow range, and the cost was still high. The early settlement cost was high, making it difficult for traders to make profit. For the downstream, the current procurement costs are relatively high, and the enthusiasm has declined. Most of them are wait-and-see operations, which suppresses normal demand to a certain extent. On the whole, it is expected that domestic cold rolling will be mainly operating at a high level this week.
Plate: On March 12, the average price of 20mm general plate in 24 major cities across the country was 4979 yuan/ton, an increase of 54 yuan/ton on a week-on-week basis. From the perspective of supply, with the recent completion of the overhaul of the Yingkou and Xinyu rolling lines, the output of the medium plate may increase slightly, and the high output will continue throughout March. From the perspective of the circulation situation, the recent good news stimulates traders. The mood is more exciting, and the quotation fluctuates greatly, but it also strengthens the wait-and-see attitude of downstream companies, which leads to general high transactions in the market and it is difficult to support the continuous upward price. In terms of demand, the social inventory of the medium board fell slightly last week, and the decline was not obvious. The downstream demand is essentially normal, but due to the large fluctuations in the market, the procurement schedule is affected. It is comprehensively estimated that the plate price may fluctuate in the range this week.
Imported ore: On March 12, 61.5% of Australian PB fines in Qingdao Port reported 1122 yuan/ton, a week-on-week decrease of 38 yuan/ton. Last week, Mysteel surveyed 247 steel mills with a blast furnace ironmaking capacity utilization rate of 90.39%, a month-on-month decrease of 1.66% and a year-on-year increase of 10.13%. According to Mysteel's statistics, the imported iron ore inventory of 45 ports across the country was 12.8824 million tons, an increase of 932,000 tons.
Coke: On March 12, the domestic coke market was operating weakly, and steel mills successively started the fourth round of coke reduction. On the supply side, the coke companies’ enthusiasm for starting operations has not diminished. However, some coke companies have accumulated coke inventories due to maintenance and production restrictions in the downstream market, and the pressure on shipments has increased slightly. On the demand side, due to the stricter environmental protection policy of Tangshan, steel mills are restricted. Production overhauls have increased, and operating rates may drop slightly. At present, coke inventories in steel plants are at mid-to-high levels, and coke arrivals are acceptable, and the pace of procurement has slowed down. Even some steel plants have controlled arrivals. On the whole, the coke market supply is temporarily loose, and the coke market is expected to operate weakly in the short term.
Scrap steel: On March 12, the scrap steel market performed narrowly and weakly. Price-adjusted steel mills mainly lowered scrap prices, while mainstream steel mills' scrap prices remained stable. On the 12th, the average price of scrap steel in 45 major markets across the country was 2989 yuan/ton, down 3 yuan/ton from the previous trading day. Last week, the average daily arrivals and average daily consumption of steel mills increased significantly. The arrivals have far exceeded the level of the year before. The inventory has also ushered in a new turning point. At the same time, scrap steel prices are at a high level. Regional base terminal shipments have become active, but scrap steel resources in the market are still tight, and heavy industrial waste is hard to find, so prices are still supported. Scrap prices are expected to consolidate in the short term.