Weak market steel prices fell significantly

Last week (April 15 - April 19), the domestic steel market price fell in an all-round way under the pressure of various bad news, among which the falling price of sheet metal was more fierce than that of building materials. The main reason is that on the 12th, the peripheral capital market plummeted over the domestic market and the electronic market and other long-term markets, resulting in a sharp decline in futures prices of nearly one hundred yuan, a serious blow to the spot market confidence, to a certain extent caused panic mentality, and the latest announced The poor performance of domestic economic data in the first quarter further dragged down the weakness of commodity prices. At the same time, a new record high crude steel output makes traders almost desperate for the market outlook, the market pessimism aggravated, large customers weighed down costs without sacrificing prices, the phenomenon of throwing goods repeatedly appeared, the terminal is very cautious, on-demand procurement, the amount of stock Overall, the market performance was very weak last week, with volume and price falling.

By the 19th, the average price of the 6.5mm high line on the Shanghai market Jiujiang was 3430 yuan/ton, down by 50 yuan/ton from the previous weekend; the average price of the Xicheng 25mm tertiary rebar was 3560 yuan/ton, down by 70 yuan/ton; Rizhao The average price of 5.5mm hot rolled carbon was 3,730 yuan/ton, down by 110 yuan/ton; the average price of 1.0mm cold-rolled steel by Wuhan Iron and Steel was 4,700 yuan/ton, down by 30 yuan/ton.

As far as the market is concerned, the current long-term market is very sluggish, the spot market price has broken down, and traders have changed their attitude towards the market outlook. They are generally pessimistic and expect to be poor. In terms of market inventory, last week due to the poor shipments of traders, the steel mills shipped well and the overall inventory rose slightly. Among them, the increase in inventory of sheet metal resources was more obvious and inventory pressure was greater. Some analysts in the market believe that the frequent collapse of the capital market at this stage has caused all parties in the market to bear a bearish sentiment, pessimism has spread, confidence has been greatly affected, bearish gains have dominated, prices of big investors have fallen repeatedly, the spot market panic has intensified, and the short-term downtrend Hard to stop.

For the market, the author thinks it needs to consider:

First, the fall in futures prices still exists. Although the price of snails and electronic disks rebounded last Friday, the spot price of some regions has played a certain stimulating effect, and traders have taken advantage of the increase. However, in general, the process of price decline has not yet been completed. With the declining support factors such as demand and cost, the futures price will continue to fall under the pressure of high output and high inventory.

Second, the cost support weakened. Although prices of iron ore and other metals have remained stable at a relatively high level recently, prices of metallurgical raw materials such as steel billets and coke have been significantly reduced, and cost support has been weakened. With the continued weakness in the spot market, raw material prices will be difficult to keep up with, and face enormous Down pressure. And after the spot price fell sharply, the extent of inversion with the ex-factory price of the steel plant increased significantly, and the pressure on the price reduction of the steel plant increased.

Third, supply pressure has increased. Although the data shows that domestic construction steel stocks continue to decline, but sheet stocks continue to climb, and with the end of the traditional peak season of gold three silver four, steel demand will gradually weaken, and later traders will be more likely to ship difficult. At the same time, the latest statistics from China Iron and Steel Association show that the average daily output of crude steel in the first half of April was 2.239 million tons, which was 50.2 million tons or 2.51% higher than the 2.019 million tons in the end of March, setting a record high. Inventory pressure on market prices continues to increase.

In summary, the author believes that at present, the traditional peak season is coming to an end, and the desire to pull steel prices up by demand is difficult to achieve. At the end of the month, traders are under pressure to repay their loans. At this stage, when steel prices fall sharply, market transactions are weak. In order to obtain goods, businesses compete for prices, and price declines are difficult to stop. In the short term, they will continue to decline.