Steel Prices Are Easy To Rise But Hard To Fall in September
Looking back at the steel market in August, as of the 31st, although steel prices rebounded slightly during the period, they were in a fluctuating and falling trend for most of the time. The comprehensive steel price index fell by 89 points, and the thread and wire rods fell by 97 and 88 points respectively. The prices of thick plates and hot-rolled plates fell by 103 and 132 respectively, while the prices of cold-rolled plates remained flat. The price of 62% iron ore rose by US$6, the comprehensive price index of coke rebounded by 6 points, and the price of scrap steel fell by 48 points. From the perspective of average price, the price of comprehensive steel, hot-rolled and cold plates rebounded by 1, 32 and 113 points respectively Points, threads, wire rods and medium plates fell back 47, 44 and 17 points respectively. Finished materials were weaker than expected, and raw materials and fuels were stronger than expected. However, it was also clearly mentioned in last month's report that the implementation of the production restriction policy is the basis for a rebound, and it is necessary to prevent enterprises from being inactive in restricting production. Looking forward to the steel market in September, steel mills are gradually controlling production, steel prices are easy to rise but hard to fall, and raw materials are easy to fall but hard to rise.
Looking forward to the steel market in September, steel prices still face periodic pressures, mainly reflected in:
The first is the pressure on supply. According to the data from the Iron and Steel Federation, the average daily molten iron production in mid-to late August was 2.456 million tons. The molten iron production did not decline in the last week of the month and was at a relatively high level. It constituted a supply to the market in early and mid-September. pressure.
Secondly, there is the pressure of demand. According to the statistics of the Steel Federation, the average daily transaction volume of building materials in August was about 145,000 tons. Funds for infrastructure, real estate and new construction still have a drag on the release of demand in September. Although there will be a certain release of seasonal demand, The overall kinetic energy is still insufficient, and the pressure still exists. In terms of exports, the price gap between domestic and foreign prices has further narrowed, and overseas demand has fallen, which will also lead to a further decline in indirect and direct exports of steel on a month-on-month basis.
In addition, raw materials and fuels will begin a formal phased decline in September, which may have a certain phased drag on steel prices.
Even if the steel price falls in September, the space is relatively limited. First, only half of the steel mills are currently profitable, and even if there is a profit, it is negligible. If steel falls by 50 to 100 yuan/ton, the profitable steel mills may again return to around 30%, there will be no need to restrict production at that time, and steel mills will take the initiative to reduce production so that supply and demand can be rebalanced and prices restored.
