Abstract Due to the influence of the Spring Festival holiday, the domestic steel market took the pre-weakness of the year, the steel shipments dropped sharply, and the inventory of the manufacturers continued to rise. The China Federation of Logistics Purchasing (hereinafter referred to as the China Federation of Materials) Steel Professional Committee released this January. Steel PMI index is 40.7...
Affected by the Spring Festival holiday, the domestic steel market took over the weakness of the previous year, the steel shipments dropped sharply, and the inventory of the manufacturers continued to rise. The China Steel Purchasing Federation (hereinafter referred to as the China Federation of Materials) Steel Professional Committee released the steel in January this year. The PMI index is 40.7%, which is below the line of glory for five consecutive months. On February 11, the industry insiders interviewed that the steel market is expected to see improvement in February, and in March and April, as the construction rate of the construction site increases, the steel market will usher in a small peak demand.
Steel PMI fell again
The reporter was informed that since mid-December last year, the domestic steel market entered the off-season, the market demand fell to the "freezing point", the steel trading volume fell sharply, and the steel market lasted for nearly 10 months.
According to the China Steel Association, as of the end of January, the inventory of key statistical steel enterprises was 12.142 million tons, down 5.69% from the end of December 2013, but the year-on-year growth rate was still as high as 25.7%. The continuous reduction of production by steel mills and the active price cuts at the end of the year directly led to a sharp drop in inventories in early January.
However, according to the monitoring of “My Steel Networkâ€, the post-holiday inventory of the five major steel products (rebar, wire, hot-rolled, cold-rolled, medium-thick plate) in major cities in China was 17.8786 million tons, compared with the last statistics (January 24). Japan) increased by 2,291,100 tons. The increase of 1.79 million tons is for construction steel, accounting for 78.2%, and the proportion is 3.6 percentage points higher than that during the Spring Festival last year.
"The increase in stocks in the Spring Festival this year is larger than in previous years. In addition, raw material prices have fallen, steel prices have lost support. In February, steel prices are likely to remain sluggish and it is difficult to rebound." Qiu Yuecheng, a steel analyst at Xiben Shinkansen, told reporters that with domestic steel The continuous surge in inventory, the lack of market demand, and the tight capital situation of steel companies have suppressed the rebound in steel prices after the holiday.
When talking about steel prices in February, analysts believe that considering the market inventory will continue to rise in February, the market's accumulated inventory digesting and capital recovery pressure is still relatively large.
"If the funds continue to be tight in the later period, it may trigger a new wave of destocking behavior of steel mills, and this will continue to increase social stocks, and the supply pressure of the market will further increase. The current inventory is still much higher than the same period last year, indicating this year. The overall order situation is still relatively severe." Qiu Yuecheng said.
Recently, the reporter learned from the China Federation of Iron and Steel Professional Committee that the steel industry continued to slump in the first month of this year. The steel PMI index in January was 40.7%, a sharp drop of 7 percentage points from the previous month, starting from 49.2% in September 2013. It has been below the 50% glory line for the fifth consecutive month. In the relevant sub-indicators, both production volume and new orders showed a significant decline, while finished goods inventory rebounded.
At the same time, China Federation of Materials believes that considering the continuous rise in inventory and sales pressure since December last year, coupled with the slow start of construction of the Spring Festival effect and the half-off tradition of steel traders, the steel market demand in February will be difficult to pick up.
Steel market transactions "falling cold"
High steel inventories stem from low demand. In an interview with reporters, many analysts pointed out that due to the "cold spring" climate and festivals, market demand has not been seen, and during the Spring Festival, steel mills have normal production schedules, which have not slowed down the pace of shipment. During this period, it was basically stagnant. After many days of accumulation, under the large supply of resources and the sluggish market transactions, steel stocks in various markets showed significant growth. In the short term, market demand is still difficult to recover, and social inventories will continue to grow.
According to the statistics of China Iron and Steel Association, in January, the average daily sales volume of 86 key steel enterprises of China Steel Association was 1.288 million tons, down 3.48% from the first ten days of December 2013. From the perspective of subdivided varieties, the sales of long products in early January It was 6.446 million tons, down 5.74% from the first ten days of last year. In the same period, the sales of sheet and strip was 6.108 million tons, down 0.17% from the first ten days of last year.
“At the same time, under the fall of steel prices, steel traders’ demand for stocking was weaker than expected, which led to the overall demand of the steel market dropping to freezing point and further restricting steel prices.†Qiu Yuecheng told the Daily Economic News.
According to the data of China Steel Association, in early January of 2014, the average price of steel products of 86 key enterprises was 3,904 yuan/ton, down 2.11% from the end of December 2013. 3,662 yuan / ton, down 1.3% from the previous month, the price of sheet metal decreased by 0.2% to 4066 yuan / ton.
The reporter was informed that the first trading day after the holiday, the domestic steel spot market performance was flat, and the coal coke in the futures market fell. On February 7, the coking coal 1405 contract led the decline with a decline of 1.83%. The rebar 1405 contract closed at 3411 yuan/ton, down 1.04%; the iron ore closed at 856 yuan/ton, down 1.15%.
"Overall, when demand in the peak season has not yet started but expectations are still pessimistic and inventory pressure has increased, steel prices will remain under pressure in the short term," said Wang Hetao, an analyst at Changjiang Securities.
The steel index provided by the Nishimoto Shinkansen shows that on February 11, the steel index was 3,450, down 30% from January 27 before the Spring Festival.
“The monitored data shows that there are some transactions in the past few days after the Spring Festival, but the spot market price is still in a down state, and the market inventories have risen sharply, and the pressure on merchants is also large.†Qiu Yuecheng told reporters yesterday.
The prices of mainstream steel mills also showed significant differences. Baosteel's sales volume of hot and cold coils was raised by 80~120 yuan/ton in February, while orders for WISCO, Shougang and Angang increased orders in February. stay the same.
Steel prices are expected to stop falling in March
“At present, steel traders have basically gone to work, but migrant workers need a stage to return to the city, and the construction sites have not yet started. Moreover, the inventory pressure is relatively high, and the entire February will be closed or half-closed. The demand is unlikely to have obvious improvement. It is better to wait until the beginning of March." Qiu Yuecheng said.
In the interview, although many analysts pointed out that steel prices may remain sluggish in February, it is difficult to rebound. But for now, the recovery of real demand in February is still unknown.
According to Lei Xiaorong, editor-in-chief of Liaoning Province, "My Steel Network", the maintenance of steel mills in February was not significantly overweight, the production situation was relatively stable, and the average daily output was even higher than that in January.
In the opinion of many analysts, the current steel price has been at a low level in 7 years, but the market demand is not improving, and the superposition of various negative factors, the market price does not rule out the possibility of continued decline.
However, some experts also believe that with the increase in the construction rate of construction sites in March and April, the steel market will usher in a small peak of demand. At this time, it is possible to usher in the node where steel prices have rebounded.
Faced with the fact that steel prices are at the bottom of the operation, Lei Xiaorong said that there is still a big hope in March for the market, and it is necessary to pay attention to the situation of market demand follow-up.
Wang Jinhua, an analyst at the "My Steel" Research Center, also believes that considering that everyone is still optimistic about the opening of the holiday, and some steel mills are more satisfied, the mainstream steel mills in March 2014 ex-factory price (listed) sheet or It will continue to stabilize the upward trend. It is expected that some steel mills or varieties with better orders will increase by 50~100 yuan/ton. Whether other steel mills or varieties will follow up will depend on the fullness of their orders, and long products will maintain a weak steady state in the middle.
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