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In recent years, the domestic iron and steel industry is accelerating mergers and acquisitions. Recently, news of Shagang Group's plan to restructure Angang Group and Angang Group's plan to reorganize Bengang Group has spread. Shell Finance prev

Time : 2021-05-05 Hits : 51

The hot steel market unpredictably began to continue to fall, out of the "two heavens of ice and fire" in a short period of time. Futures such as rebar, hot-rolled coil and iron ore have fallen sharply in the past few days, and the rapid change of face has also affected the spot market. Has the long-awaited inflection point for downstream companies to cool down? In the short cooling process of the steel market, high-level propaganda, institutional actions, monetary policy changes and quiet changes in the supply and demand environment, which are the dominant factors affecting the steel market?

 

     

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Downstream market waits to cool down

 

From the perspective of the market some time ago, market prices have clearly deviated from the fundamentals of supply and demand, and the will to stabilize or even restrain the excessively rapid rise of iron ore and steel prices is obvious at the regulatory level. In order to stabilize the price order of the steel market, on May 14, several relevant departments in Tangshan and Shanghai interviewed local steel production companies, emphasizing strengthening price management and maintaining the price order of the steel market.

 

With the soaring steel prices, domestic steel companies' profit per ton of steel easily exceeded 1,000 yuan, which was at the highest level in history. Although domestic steel demand fell in the first quarter, foreign demand was gradually recovering. After the adjustment of steel export tax rates, domestic steel companies still have a large profit margin, which continues to stimulate their enthusiasm for production.

This round of callback can be said to be expected, but does this mean that the turning point of the industry's cooling has appeared?

According to Wang Guoqing, director of the Lange Steel Research Center, the decline in futures prices in this round is related to the increasing inflationary pressures in the United States, expected changes in monetary policy, and the regulator's propaganda to stabilize prices.

Currency liquidity is also one of the important factors affecting the price of steel, and the market is also very concerned about changes in financial data. In May, the growth rate of broad money and narrow money balances dropped significantly from the previous month, and the new social financing in May during the same period did not meet the previous market expectations.

The rapid rise of steel prices has led to a substantial increase in the cost of key projects, which has had a certain impact on downstream procurement demand, which has been reflected in the recent changes in shipments and social stocks of steel. Recently, the shipments of 10 large households in the Beijing building materials market have dropped significantly, and the shipments of Tangshan profile steel plants have also decreased significantly; at the same time, the decline in the social inventory of sheet materials in 29 key cities has also decreased significantly. With the gradual arrival of the rainy season in the south, the inventory decline will slow down, and the callback period in the domestic steel market will continue for a period of time in the short term.


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