The steel price of construction steel prices rose indefinitely in February or faced a “cold winter”

Pre-holiday holidays, early spring festivals, and post-holiday return times are mixed. The domestic construction steel market was basically in rest or semi-closed state in February, and trading was light, but steel prices rose. According to the new market report provided by the well-known steel spot trading platform “Nishimoto Shinkansen”, the price gap between steel futures and spot is shrinking in the immeasurable skyrocketing market, and whether the steel market will face a “cold spring” remains to be seen. .

According to monitoring, the pre-holiday spot market for construction steel is "increaseless," and is expected to increase after the holiday season. As of the 20th, the average price of tertiary rebar in the country rose by 137 yuan per ton from the end of last month. From the comparison of futures and spot prices, steel prices in the pre-holiday period have been pushed up sharply and the “current price difference” has reached a new high level in the past two years. However, the precipitous increase in steel during the pre-phase period has accumulated momentum in the sell-off. Coupled with the low sales of the spot steel market in the early days, the steel price in the post-holiday period has rapidly dropped. The trend of “strong weak currents” has caused steel traders to be “unsure”.

After the holiday, domestic steel stocks have risen sharply, while steel mills still maintain a “fast pace”. Relevant data show that the total inventory of domestic wire rod, rebar, hot and cold coils and other major varieties has increased by more than 11% after the holiday. The opinion of industry analysts is that, on the one hand, pre-holidays businesses actively stocked goods. On the one hand, market transactions during the Spring Festival holidays basically stagnated, and post-holiday stocks were expected to rise. Moreover, compared with historical data, this year's increase in inventory is higher than last year, but it is still the next lowest level in the past five years. Domestic crude steel production rebounded rapidly in early February. According to the relevant estimates, the average daily output of crude steel of major domestic and medium-sized enterprises in the first half of February reached 1,701,400 tons, which was 6% more than last year, reaching a historical level. The second-highest level was just below 1,723,200 tons in late February 2011.

Analysts who have contact with steel mills have the impression that under the background of better execution of pre-orders and continuous increase in low-profit prices, many steel mills have high production enthusiasm. As a result, the country’s crude steel production appeared in early February. Quickly picked up. During the Spring Festival, “the steel mills did not take vacations”, most of the steel mills maintained normal production, and some key steel mills also significantly accelerated the pace of production. “The Spring Festival holiday market demands a vacuum, but production is accelerated.” This adds pressure on the supply and demand balance of the steel market in the later period.

The price of iron ore continues to rise. Since February, the total price has risen by 30 yuan per ton. The people in the mining industry reported that the continuous increase in the price of imported ore in the previous period also formed a certain pull on the trend of domestic mines. However, at present most of the ore stocks of the steel mills can be maintained until the end of the month. Therefore, the action on procurement is not big. Generally, we adopt a wait-and-see attitude and the market transactions are relatively light. At present, the offer price for 63.5% grade Indian fines has increased by US$8.5/tonne from the end of last month; the 62% grade Platts iron ore index has increased by US$7/ton, reaching a new high since mid-October 2011. According to statistics, the inventory of iron ore in the 36 major ports of the country after the Spring Festival was 78.2 million tons, although it was 500,000 tons more than before the holiday, it was still at a relatively low level.

Analysts at relevant institutions believe that the domestic steel market will gradually recover its demand in March. From the laws of the past years, it can also be seen that before and after the Ching Ming period will be a small peak in demand release in the first half of the year. Based on the good judgment of the market outlook, the steel production enthusiasm is still high, and the domestic steel production may further increase in the later period. However, the price of steel in the post-holiday period is already falling. It seems that it is predicting the squeeze of the high water content of steel prices. This will bring a “cold winter” to the spot steel market. The industry is still paying close attention.

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