On April 19, the steel spot market rose slightly, and the main varieties of the futures market were mixed, including 50,900 thread positions and 455 million iron ore outflows. At present, overseas risk disturbances have intensified, market risk aversion has increased suddenly, and steel prices...
1. Analysis of long and short factors
1. Luo Tiejun of China Iron and Steel Association: The association attaches great importance to the crude steel output regulation policy this year, and is cooperating with national ministries and commissions to carry out relevant work
Luo Tiejun, vice president of the China Iron and Steel Association, said at the 2024 Guangdong-Hong Kong-Macao Greater Bay Area Ferrous Metal Industry Chain Forum that the current steel industry is facing a prominent contradiction between strong supply capacity and weakening demand, and has entered the "prisoner's dilemma". The China Iron and Steel Association attaches great importance to the crude steel output regulation policy this year, and is cooperating with national ministries and commissions to carry out relevant work. With the development of crude steel production regulation in the later stage, the supply and demand of the steel market are expected to continue to improve, which is good for steel prices.
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2. The second round of coke increase opened
Yesterday, coke enterprises in some areas opened the second round of increases, among which Etuoke Banner Xinhang Coking Co., Ltd. decided to raise the coke at 0:00 on the 19th, with dry quenching coke rising by 110 yuan/ton and wet quenching coke rising by 100 yuan/ton. The market expects that this round of coke will have about 3 rounds of increases, superimposed May Day is approaching, steel mills are expected to replenish the warehouse, iron ore and other raw fuel prices are running at a high level, and the steel cost support is strong, which is good for steel prices.
3. FED interest rate hike remarks + Middle East explosions Overseas risk disturbances intensify
On April 18, local time, New York Fed President John Williams said that another rate hike is not his "baseline scenario", but if economic data justifies this action, it is possible. On the 19th local time, explosions were heard in the early morning of the same day in the provinces of Baghdad and Babylon in Iraq, Suweida in southern Syria and Isfahan in Iran. According to ABC, a U.S. official confirmed to the outlet that an Israeli missile hit a target inside Iran. The possibility of the Federal Reserve raising interest rates was put on the "table" again by Fed officials, while the situation in the Middle East heated up rapidly, the market risk aversion increased suddenly, and the price trend of steel was bearish.
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Second, today's steel market
1. Spot market
Today's domestic steel market is mainly rising, and the trading volume has fallen.
2. The main force of futures
In terms of futures, as of the close, the main forces of various varieties were mixed.
3. Steel mill price adjustment
According to incomplete statistics, 19 steel mills raised the ex-factory price of building materials today, with a range of 10-100 yuan/ton. The details are as follows:
1. Jiangsu Nangang: The price of thread was raised by 20 yuan/ton.
2. Yangtze River: The price of thread and coiled snail was raised by 20 yuan/ton.
3. Shandong Iron and Steel: The price of threads and coiled snails was raised by 20 yuan/ton.
4. Masteel: The price of thread, wire rod and coil snail was raised by 30 yuan/ton.
5. Tangshan Donghua: wire rod price increased by 40 yuan/ton.
6. Yutian Jinzhou: wire rod price increased by 20 yuan/ton.
7. Jiyuan, Henan: The price of thread, wire rod and coiled snail was raised by 40 yuan/ton.
8. Anyang Zhougang: ribbed steel bars increased by 40 yuan/ton.
9. Laigang: the price of thread was raised by 20 yuan/ton, and the price of wire rod and coiled snail was raised by 40 yuan/ton.
10. Shiheng: the price of thread was raised by 20 yuan/ton, and the price of wire rod and coiled snail was raised by 40 yuan/ton.
11. Lianyuan Steel: The price of thread was raised by 20 yuan/ton.
12. Xianggang: The price of thread, wire rod and coiled snail was raised by 10 yuan/ton.
13. Fushun New Iron and Steel: The price of thread, wire rod and coil snail was raised by 10 yuan/ton.
14. Lu'an: The price of thread, wire rod and coil snail was raised by 30 yuan/ton.
15. Licheng Taihang: The price of thread was raised by 20 yuan/ton.
16. Shanxi Meijin: the price of thread was raised by 50 yuan/ton, and the price of wire rod and coiled snail was increased by 100 yuan/ton.
17. Chongqing Yonghang: The price of thread, wire rod and coiled snail was raised by 20 yuan/ton.
18. Zhongyang, Shanxi: the price of wire rod was raised by 20 yuan/ton, the price of thread was increased by 50 yuan/ton, and the price of coiled snail was increased by 100 yuan/ton.
19. Gui Wangang: the price of thread was raised by 70 yuan/ton, and the price of wire rod and coiled snail was increased by 30 yuan/ton.
All adjustments are inclusive of tax.
3. Raw fuel market
Today's imported ore: the market price of imported iron ore mainstream varieties is stable and weak. With the improvement of steel mill profits, the output of hot metal continues to rise, driving the demand for iron ore, but the arrival of foreign mines is high, and the iron ore inventory in the port has refreshed the highest level since May 2022.
Today's coke: coke prices remain stable and strong, and individual coke companies have opened the second round of coke increases of 100-110 yuan/ton. On the demand side, steel mills have a good demand for coke procurement, and the speculative demand for coke market has increased, and coke inventories of coke enterprises are running at a low level.
Today's scrap steel: scrap prices are mainly rising, with a range of 10-50. Recently, the price of finished steel has risen one after another, and the price of scrap steel has risen, coupled with the approach of the May Day holiday, most steel mills have replenishment needs, supporting scrap prices, but at present, scrap steel for the cost of molten iron, there is still no advantage, and it is expected that scrap steel prices will remain stable and strong next week.
Today's billet: Tangshan Qian'anpu billet resources ex-factory tax reported 3490 yuan/ton. The price performance of the national billet market is mixed, the snail shock is weak, the downstream finished product price has risen slightly, the transaction is relatively average, and the billet price is expected to remain stable and strong next week.
Fourth, Tao Xiaogang's point of view
Affected by factors such as external risk disturbances and the slowdown in the transaction of high-priced resources in the steel market, today's thread, hot coil and iron ore disk performance is weak; however, coke has opened the second round of rise, and there is still 1-2 rounds of room for rise in the follow-up, and the performance of bifocals is relatively strong. Looking ahead to next week, as steel mill profits continue to improve, hot metal production may continue to rise, supporting raw fuel prices, while steel inventories are expected to continue to decline, but the decline may be narrower. In the short term, the fundamentals of the steel market are preferred, but steel prices may be adjusted after a rapid and sharp rise, and steel prices are expected to be weak and then strong next week, with a range of 30-60.
Information reference: CBN, Finance Associated Press, Xiben Information, Lange Steel Network, My Steel, etc.
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