Market downturn Steel prices continue to fall

Since the beginning of the month, the market transactions have become increasingly cold and fatigued. Both middlemen and end-users are waiting for a wait-and-see attitude, and signs of a complete weakening of demand are evident. In early October, under the condition of a shortage of market resources, steel prices still have some support, and the overall performance is a shock pattern. Later, prices such as ** and electronic discs have dropped, driving spot prices to continue to weaken. At the same time, the prices of billets and other metallurgical raw materials fell sharply, which also greatly undermined market confidence. The most important thing is that, due to seasonal factors, the demand for steel products has shrunk in full, and the turnover has dropped significantly. Buying up the buying psychology that has not bought up has even made it even worse for the already extremely deserted market.

Specific to the market, as of October 18, the transaction price of 8mm coils in Shanghai was RMB 3,520/t, which was RMB 20/t lower than the previous weekend; the transaction price of RMB 6.5mm high line was RMB 3,280/t, compared with the previous weekend. It fell 40 yuan/ton; the transaction price of Ф20mm tertiary rebar was 3410 yuan/ton, down by 20 yuan/ton from the previous weekend; the transaction price of 5.5*1500 poly-carbon coil was 3,460 yuan/ton, down by 60 yuan from the previous weekend. RMB/ton; 1.0*1250 Prairie transaction price was RMB 4380/ton, which was RMB 10/ton lower than the previous weekend.

In terms of metallurgical raw materials, as of October 18th, 65%-66% grade of Tangshan was quoted at 1080 yuan per ton, which was flat compared with the previous weekend; the price of 150*150 billet in Tangshan was 3020 yuan per ton, low alloy. The 150*150 billet price is 3140 yuan/ton, which is the same as the previous weekend. Due to the continuous downtrend in the market price of raw materials and the slight fall in crude steel output in early October, the overall demand of steel mills is poor, and the wait-and-see atmosphere is relatively strong. In the short-term, raw materials will be mainly shock consolidation.

At present, it seems that the "silver ten" market has basically turned into a bubble, with the end of the decline in temperature, the terminal demand is easy to increase, the confidence of merchants gradually disappeared, steel prices are difficult to pick up.

1, from the demand side. Although the macroeconomic data preferences announced last week, they have limited stimulus to steel prices. And at the end of the year, the start of production plans for all industries is drawing to a close, and there is little demand for new steel. With the seasonal changes in the weather, terminal purchases such as construction sites in the northern regions have plummeted and the south tends to shrink. The overall industry demand is apt to decrease and increase. In addition, policy dividends such as energy conservation and emission reduction, environmental protection and production restriction have weakened, enforcement is insufficient, and the steel price is of limited interest.

2, from the supply side. According to the latest statistical data from the China Iron and Steel Association, in the first half of October, the daily output of crude steel of key member companies was 1.7641 million tons, a reduction of 23,900 tons, and a decrease of 1.34% compared with the previous period; the national average production of crude steel was 2.2181 million tons, a decrease of 2.39 Tens of thousands of tons decreased by 1.11% from the previous month. Although the crude steel output slightly decreased, the reduction was small and the total amount was still high, which was not enough to affect the fundamentals of steel. At the same time, as Northland moved south, the market inventories in the southern region tends to rise, suppressing the rise in steel prices.

3, from the cost point of view. At present, due to the stagnant spot market and the increasingly cautiousness of the downstream steel mills in the metallurgical raw materials market, the wait-and-see attitude is obvious. In the short-term, it will still be in a consolidation mode, and the chance of a sharp rise is not high. The steel mills are under pressure from stocks, capital, and markets, and the factory prices still have some room for downward adjustment, which weakens the support for steel prices.

To sum up, the demand weakened, the supply pressure was hard to reduce, the cost was down, and the market turnover was lukewarm. In the short term, steel prices will operate in a weak and overcast state.