This Wednesday, the domestic steel market or continue to expand. According to monitoring data show: by the end of March 2nd, average price of the 24 major market thread steel 20mm hrb400e 2073 yuan / ton, compared with the last trading day up 15 yuan per ton; the 24 major markets 4.75 hot-rolled plates volume average price of 2200 yuan per ton, compared with the last trading day rose 32 yuan per ton; in the 23 major market 14-20mm in general average price 2198 yuan per ton, compared with the last trading day rose 39 yuan per ton. Look from breed, plate gainers, part of the market rose more than 50 yuan, slightly smaller range of building materials.
Recently in the billet, iron ore raw material prices driven by market pull up the mood lifting. We might as well do several aspects analysis for price rises:
The first is whether to continue to push up the power of upstream materials? From the steel market, yesterday after 40 yuan rise, Tangshan carbon billet today rose 40 yuan to 1760 yuan / ton, the steel spot market influence. According to the Tangshan local businesses to reflect, pull up after the turnover of less than, some steel mills resources have been very difficult to increase hair. But the current downstream operating situation, with rising steel prices, with material factories increased, did increase demand. Tangshan local profile, strip and thread end of the mid operating rate is increased by about 5%. But the slow recovery of ironmaking and steelmaking capacity, blast furnace operating rate added to 1%, plus the March billet export orders, resulting in short-term tight balance between supply and demand situation. Due to the release of liquidity, the Expo and the supply side reforms such as the positive impact of market confidence, generally for the better. As the billet is still short-term stronger trend, but quickly pull up needs time to repair. From the point of view of ore price, port spot iron ore prices continue to rise, 375 to up the Qingdao powder of Hong Kong 61.5%PB quotation, weekend 365 yuan / tons, 62% of Platts has pulled up to 51.5 yuan in the years after high, iron ore futures highest up to 387 yuan, a 4 months high. Iron ore port stocks fell and the miners cut loss release ore prices continue to promote a stronger signal. Vale is expected in 2016 will close 70 million tons of iron ore production capacity, but note that Vale is shutting down the production capacity, output in 2016 is not necessarily down. From the current futures and spot have strong upward momentum, although the cost of supply and demand, etc., short of the logical, but do not see the short signal. Continue to support short-term billet and steel prices.
Secondly from the point of view of steel, a resumption of production, lack of motivation, increased industry losses last year, many steel enterprises reported substantial losses, of which Sha Steel also appeared a loss of the year, if short time steel prices of steel enterprises to resume production, after the resumption of production is bound to face returned to a loss position, not to mention high ore to steel mill profits is difficult to significantly improve. But the prices continued to rise, some steel mills in March the resumption of production will increase, from time to time, production release negative impact to the market a lag of about one month, so enter the April, the pressure of market resources may increase. On the other hand, steel postganglionic ex factory price continue to hike, the direct effect is driving the market prices higher, indirectly increase the ordering cost steel trading business and downstream users. From steel mills in mid February inventory growth point of view, traders continue to reduce the enthusiasm of the cargo, steel social inventory may like last year in the 3-4 month peak, then follow up will face this a stage to inventory.
Again from the point of view of policy and industry situation, the release of liquidity, real estate stimulus, the iron and steel industry production capacity is supply side force point, short-term policy psychological stimulus larger, the conduction of the positive factors continue to enlarge. Such as real estate, in successively lower first suite, two suites payment, preferential interest rates and so on, the major cities housing prices soaring, prompting housing sales rise. But the area of land acquisition, new construction remained low, developers get tepid, investment downturn caused by the attack, the new leverage risk is still expanding. In the industry, not bankruptcy, large state-owned iron and steel enterprises substantial production, new bank credit policy green light on some steel enterprises, production will soon go down easily. In addition to infrastructure projects, manufacturing industry faces of a general excess situation does not make steel demand have a big change, despite the presence of structural opportunities, but change not demand for steel cooling trend, also change the steel supply and demand is difficult to adjust the fundamental contradiction. So, in this form, the March seasonal demand returned to normal, but not too high in the hope that demand.
Combined with the previous analysis, steel prices have need to rise, also facing the rally after the callback risk. At present the screw steel price has risen to 2073 yuan than the current high cost of a 170 yuan (according to the ore price direct costs) or so, to continue to rise space is limited. On the whole, steel prices continue to maintain a slight upward momentum in the market growing trend, but also makes a variety of potential changes in the market factors. For traders, combined with the actual situation, appropriate shipping to reduce inventory, account profit pocket for security, well in advance of the risk plan, still worthy of consideration.