Latest Steel Market Guidance and Market Analysis

★ Today's Focus ★

From December 22 to 23, the National Development and Reform Commission approved eight transportation and transportation projects within two days, involving a total investment of 234.626 billion yuan. Recently, the National Development and Reform Commission approved the "big stroke" on the approval of infrastructure construction projects. On December 23, the National Development and Reform Commission approved six projects in a concentrated manner. Together with the two projects approved by the National Development and Reform Commission on December 22, the National Development and Reform Commission approved a total of eight within two days. A total of 234.626 billion yuan was invested in transportation construction projects.

Interpretation: In December domestic steel prices continued to hit history or new low levels in recent years. The financial pressure has highlighted the continuous shutdown of construction sites in the north, and the demand has been limited. Coupled with the continuous decline in raw material prices, the weakening of cost support has caused the steel price to stumble endlessly. However, since October, the country’s continuous investment in infrastructure projects has increased. It is a complete set of railway construction that has a strong demand for construction steel, round steel, and profile products. These products basically accounted for about 60% of the total steel used in railway construction. With the successive launch of the project next year, it will give the steel industry a share. However, for steel companies, they must seize policy guidance and product upgrades are still urgent.

On the afternoon of the 24th, Hebei Iron and Steel reiterated the price limit order for the recent sluggish market. The specific content is as follows: Hegang Steel Sales Corporation’s bar company informed that the maintenance price remains unchanged, that is, the large thread 18-25mm is not less than 2550 yuan/ton. , Other specifications are not less than 2600 yuan / ton. Please adjust the quotation in time!

Interpretation: The limit price of the steel mill is already "18-25mm for large threads not less than 2,550 yuan / ton, other specifications not less than 2,600 yuan / ton" reiterated for the third time this month, since the 18th of this month, steel Since the factory first mentioned this price limit policy, it has already foreseen that the market will usher in a storm of price cuts. As the market price was once refreshed, the market reduced not only the price, but also reduced the expectations of traders for the rebound of the steel market. .

★ morning reminder ★

[Pig iron] The market price of pig iron was slightly lower yesterday, and the market turnover stagnated. The price of raw materials is falling more than once, and the downstream purchasers have a more wait-and-see atmosphere and the market activity is extremely low. Near the end of the year, the financial pressure of some businesses began to highlight, and the short-term market is unlikely to improve. It is expected that some markets will still fall.

[construction steel] Shandong building materials morning reminder: According to Zhuo Chuang information monitoring, yesterday, Zhuo Chuang information building steel price index 706.95, down 5.41 points over the previous trading day, a drop of 0.76%. Yesterday, the mainstream transaction price of Shandong building materials fell 5-15 yuan / ton, billet prices rose slightly, the transaction situation improved slightly, but the weak is difficult to change. Close to the year, financial pressures appear, and under the downward trend of prices, steel traders have a wait-and-see mood. It is estimated that the transaction price of Shandong building materials will drop by RMB 10-20/t today.

[Hot Rolling] According to Zhuo Chuang Information Monitoring, yesterday's hot rolled coil price index was 785.86 points, down 1.09 points or 0.14% from the previous working day. The market for hot rolled volumes fell by over 30% yesterday. From the current atmosphere of the spot market, traders generally lack confidence. Under the influence of the sprint at the end of the month and financial pressure, the steel market still has room for downward adjustment. The raw material market has not stopped falling yet. It is expected that some markets in the hot coil market may continue to fall by RMB 10-20/t.

★Overseas information★

Russia sues the United States to terminate the iron and steel agreement The Russian government requested the U.S. Department of Commerce to resume the 15-year HRC agreement, arguing that the termination of the agreement violates WTO guidelines. It is understood that the agreement was signed in 1999. Through annual quotas and minimum price measures, Russia’s HR bills are allowed to be exempt from high anti-dumping duties. However, the US government repealed it on December 19. Since then, the Russian large steel company Severstal Group will face a 73.59% anti-dumping tax, and other steel companies will also face different levels of tariff rates.

From January to November, South Korea imported Chinese rebars According to the Korean Steel Association (Kosa) data, the total amount of rebar imported by South Korea from January to November was 592,200 tons, an increase of 38% from the same period last year. Among them, imports of China's rebar reached 519,900 tons, a year-on-year increase of nearly 96%, compared with 298,300 tons of imports during the same period last year, mainly due to the year-on-year drop in China's rebar import prices by approximately US$70/ton. At the same time, South Korea's imports of Japanese rebar fell sharply to 77,600 tons, a sharp drop of 53%.

★Viewpoint★

At the end of the fourth quarter, the price of Hegang showed his attitude at the midday on the 24th. Hebei Iron and Steel reiterated the price limit for the recent sluggish market. The specific content is as follows: Hegang Sales Corporation’s bar company notice that the maintenance price remains unchanged, namely: large thread 18- 25mm not less than 2550 yuan / ton, other specifications not less than 2600 yuan / ton. Please adjust the quotation in time!

From the market point of view, the current large-scale thread of the Beijing market 2340-2370 yuan / ton, more than 200 yuan lower than the limit price of the steel plant; and the highest price this month is 8th Hegang limited price of 2700 yuan / ton, compared to the current The lowest point is 350 yuan / ton; this month the average price of Beijing market is 2593 yuan / ton, showing that the recent market price decline is rapid. Considering that most of the recent steel plant resources are mainly concentrated south to south, the sharp drop in Hebei's market price will further increase the price difference between the north and the south, thus increasing southward competitiveness. According to Zhuo Chuang statistics: Shandong's first-line resources are currently quoted at 2,570 yuan/ton, second and third-tier resources are quoted at 2,550 yuan/ton, and Hegang's resources are spread at 200 yuan/ton; Shanghai's front-line resources are quoted at 2,670 to 2,690 yuan/ton, with Hegang Resources. The spread is more than 300 yuan / ton; Guangzhou first-line resources offer 2940-2980 yuan / ton, and Hegang's resources spread is 600 yuan / ton. However, from the perspective of the regional market, downstream shipments have decreased and prices have dropped sharply, which will seriously affect the mentality of the steel market and aggravate traders’ pessimistic expectations.

Judging from the steel mills, there is currently no maintenance plan for Xuanhua Iron and Steel Co., Ltd. The workshops are scheduled for production: a small-sized 16-gauge rebar rolling mill, a 22-gauge small-diameter rebar mill, a 18-gauge rebar mill, and a 14-bar rebar mill. Three rods rolled 25 gauge rebar and coil rolling coils, due to poor arrival conditions this month, the total amount of the agreement continued to decrease. Handan Steel is scheduled to overhaul the four rolling mills on the 26th. Currently, the workshops are scheduled to produce: 16 and 25 gauge rebars. Tangshan Iron & Steel continued to deliver 50% of the agreement to the agreement customers. Currently, one bar of the steel plant was discontinued and the second bar produced 25 gauge rebar. Faced with such a high output situation, the pressure on the supply and demand of the market can be seen in general, and the weaker prices are also the norm.

From the trader's mentality, as the weather turned cold, the rate of operating at the next port dropped significantly, and the demand went into hibernation. According to traders, the number of recent telephone inquiries was very low. The market can be described as “there is no market for prices”, plus steel. The settlement price of the factory is about to be introduced, and the quotations from large investors are more cautious. Most of them refer to the mainstream market prices, and the market may continue to decline further.

From the current perspective, despite the technical rebound in the main thread contract RB1505 today, closing up by 19 yuan / ton. However, this rebound is, to a certain extent, a technical correction to the early breakout position, and it should not be expected to have high expectations. The short-term downturn is still the main tone.