How far can steel rebound after three months of falling prices?
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“It cannot be said that there is any big change in the supply and demand side of the steel market at this stage, and it can only be said that people’s minds are rising.†Sheng Zhicheng, information director of the well-known steel spot trading platform “Xiben Shinkansenâ€, said. Recently, “bottom-hunting†is a hot topic in the steel market. After all, the long-term upside down of the steel market price and the ex-factory price is unacceptable to traders, and the long-repressed pull-up mood is always released.
In addition, the information agency "My Steel" also pointed out that due to the impact of real estate regulation and macroeconomic uncertainty, the current round of steel market decline is basically in sync with the stock market. On July 2, the Shanghai Composite Index hit a low of 2,319 points in the year and has now risen above 2,500 points. The steel price did not rebound, and it continued to fall until last week. "It can be said that the adjustment of the steel market is more than the stock market."
From the perspective of steel mills, since the ex-factory price of many steel products is already lower than the production cost, the pressure of loss makes the cost support effect play a role again. The latest data provided by “My Steel†shows that after the rapid decline in the previous period, the current spot price of iron ore in China has basically stabilized at around US$130 per ton, while the price of coke has fallen to 1,700 yuan per ton. Refuse to fall again. On the basis of the stabilization of major raw materials, the pricing policy of steel mills began to change: on the 20th, dozens of steel mills including Kunming Iron and Steel and Laiwu Steel collectively raised prices, although the magnitude was not large, but it was quite "燎原" Potential. Shagang, which has the meaning of a weather vane, opened its flat price in late July, which greatly encouraged market sentiment.
In the face of the long-lost bombs of steel prices, many dealers began to change their faces: the goods that were eager to “throw out†the previous week, now they are eager to “kick in the armsâ€. On the other hand, the user is getting more and more bought, and the more the seal is, the more panic. "The steel market may have a wave of intermediate rebounds." "My steel" judged.
However, some people have expressed caution. "Although the Meiyu period has passed, construction site consumption is expected to resume growth, but the next high temperature is a test for demand." Sheng Zhicheng said.
Cai Jin, vice president of the China Federation of Logistics and Purchasing, told reporters that the ferrous metal finished goods inventory index reached more than 60% in June, ranking first among all industries, and the pressure for secondary destocking was heavier. According to a statistics from the agency, the middle of the year included finished goods, circulation links, downstream users, and the total social steel inventory in transit was 90 million tons, and the turnover period was one and a half months. From the historical data, the general turnover period is one month.
"Comprehensively, the current performance of steel prices is a technical rebound in the circulation sector, which is the result of the long-term suppression of the concentrated release of mentality. The market's gains lack the support of fundamentals, and the short-term market may exceed expectations, so market participants are recommended. Do not follow the wind, the last stick of the drums is not good." Zhang Ping, an analyst at China United Steel.
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