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Raw materials are strong, steel mills are pricey in May, spiral pipe prices will not change, and the trend of strong operation

Time : 2021-05-07 Hits : 53

The May Day holiday is drawing to a close. The spiral tube prices before the holiday fluctuates, and the futures market fluctuates greatly. Iron ore once fell nearly 4%, but it did not affect the spot price. The post-holiday market is confusing. Since May 1st, some steel products Will the cancellation of export tax rebates shake up the rising steel prices? How will it start in May?

Be wary of "tariff" adjustments disturbing the market

The news of the cancellation of the "export tax rebate" was reported as early as the end of March this year, but the dust was not settled until April 28! Judging from the policy announced this time, not only the export tax rebate of some low- and medium-value-added plates was cancelled, but also Adjust tariffs on certain steel products, by appropriately increasing export tariffs on ferrosilicon, ferrochrome, high-purity pig iron and other products, and implementing a zero import suspension rate on pig iron, crude steel, recycled steel raw materials, ferrochrome and other products to reduce low added value Category exports, increase imports. To support the decline in domestic crude steel production and promote the balance of market supply and demand. At the same time, it will also help reduce the pressure on the supply and demand gap of iron ore, and ease the impact of the rapid rise of spiral pipe prices on the terminal.

The cancellation of export tax rebates for some steel products involves a total of 146 commodity codes. Based on the 53.67 million tons of steel exports in 2020, export tax rebates account for about 65% of exported products, and they are mainly concentrated in low- and medium-value added value such as hot-rolled coils. Of the sheet products. details as follows:

   On the whole, the impact of the tariff adjustment on the market share is relatively limited, and the news has been going on for a period of time, and some steel mills’ export order prices will take into account the tax rebate. The short-term impact on the market is limited.

However, we need to pay attention. On the one hand, the cancellation of the "export tax rebate" will increase the domestic market supply and promote the implementation of the production reduction policy, which will help alleviate the contradiction between the supply and demand of iron ore; on the other hand, the import tax rate on the raw material side will be reduced to zero, further increasing Imports of large raw materials increase the substitution effect of iron ore. Therefore, after the implementation of the policy, the price of iron ore fell sharply, and the pallet fell nearly 4% on the last trading day before the holiday. As the spot market did not follow up in time, it is not ruled out that the price after the holiday was under slight pressure.

May steel mills push for price increases 

  As the price of raw materials rises, steel mills have a strong willingness to uphold the price. Baotou Iron & Steel has issued a May price policy for plates, including hot-rolled plates by 580 yuan/ton, general-medium plates by 560 yuan/ton, cold-rolled plates by 340 yuan/ton, chilled by 340 yuan/ton, and galvanized by 350 yuan/ton. . At the same time, in May, many steel mills further increased the price. Shanxi Jinnan Iron and Steel increased the price by 50, and Shougang Changgang will increase the price by 30 yuan/ton for rebar, wire rod, and snails from May 3. Continued to support the post-holiday steel price.

PMI of the steel industry fell by 2.5 percentage points

  Data shows that the PMI of the steel industry in April was 45.4%, a decrease of 2.5 percentage points from the previous month. The sub-indices show that the growth rate of steel mill orders has slowed down. The new order index is 44.4%, a decrease of 2.7 percentage points from the previous month, but the new export order index is above 50%, which is 51.7%, an increase of 8 percentage points from the previous month.

   Demand has slowed down slightly, but output has also fallen simultaneously, with a production index of 47%, a drop of 4.3 percentage points from the previous month. The inventory index is declining steadily, and the product inventory index is 34.4%, which is below 40%. On the whole, steel prices are still supported in the market outlook.

   To sum up, during the holidays, although the transaction was light, the spiral tube price rose slightly. On the one hand, the overall macro outlook is improving; on the other hand, since May is still in the peak construction season, various provinces and cities are stepping up the fund connection and landing of major projects, there is still room for continuous release of demand, and the current raw materials are strong, and steel mills continue to hold prices. Therefore, even if it is disturbed by the adjustment of "tariff" after the holiday, the pressure for a short-term fall is relatively limited, and the spiral tube price in May will not change the trend of strong operation.

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