In October, the demand for steel in the domestic market remained relatively weak. Although steel production decreased, steel prices still showed a slight downward trend. Since November, steel prices have stopped falling and rebounded.
Analysis of the price trend of steel in the later stage:
The pattern of strong supply and weak demand is difficult to change, and steel prices will continue to fluctuate within a narrow range. From the later stage, geopolitical conflicts have a significant impact on the global industrial and supply chains, and the uncertainty of the global economic recovery trend is increasing. From the domestic situation, the recovery of the steel industry is not as expected, especially the sustained negative growth of the real estate industry, which has a significant impact on steel consumption. The pattern of strong market supply and weak demand in the later stage is difficult to change, and steel prices will continue to fluctuate narrowly.
Both enterprise steel inventory and social inventory have shifted from an increase to a decrease. According to the monitoring of the Steel Association, in early November, the key statistics showed that the steel inventory of steel enterprises was 14.69 million tons, an increase of 920000 tons compared to the previous month, with a growth rate of 6.7%; An increase of 1.62 million tons or 12.4% compared to the end of the previous year; A year-on-year decrease of 2.03 million tons, a decrease of 12.2%. From the perspective of social inventory, in early November, the social inventory of 5 major varieties of steel in 21 cities was 7.92 million tons, a decrease of 650000 tons from the end of October, a decrease of 7.6%, and an increase of 400000 tons, a growth of 5.3% compared to the end of the previous year; An increase of 110000 tons year-on-year, up 1.4%. The inventory of steel enterprises and social inventory continues to decline, and market supply pressure has decreased. The main issue that needs to be paid attention to in the later stage is the increasing supply-demand contradiction in the steel market. In the first 10 months, the national steel production increased by 1.4%, while the consumption of crude steel decreased by 2.0% year-on-year. At present, infrastructure and manufacturing industries, as well as steel exports, are the driving forces behind China’s steel consumption, but sustainability deserves attention. At the same time, the variety structure of steel is being optimized with the changes in the national industrial structure.
Secondly, the price of imported iron ore remains high. According to data from the General Administration of Customs, the import price of iron ore in October was 112.9 US dollars per ton, a cumulative increase of 20.9 US dollars per ton from December last year, with a growth rate of 22.7%; During the same period, steel prices decreased by 5.08% compared to the end of last year. The price of iron ore is still very high, which brings significant cost pressure to steel companies.
Post time: Nov-29-2023