On April 30, the steel spot market held steady and rose, and the main varieties of the futures market were mainly down, among which the main wire rod futures contract of the Shanghai Futures Exchange hit the fall limit intraday. "Gold three silver four" has passed, steel consumption in May is about to enter the traditional off-season, steel prices...
1. Analysis of long and short factors
1. National Bureau of Statistics: The manufacturing PMI in April was 50.4% and was in the expansion range for two consecutive months
In April, the manufacturing purchasing managers' index (PMI) was 50.4%, down 0.4 percentage points from the previous month, and was in the expansion range for two consecutive months, and the manufacturing industry continued to maintain a recovery and development trend. The Caixin China Manufacturing Purchasing Managers' Index (PMI) recorded 51.4 in April, 0.3 percentage points higher than in March and hit a new high since March 2023. The current economic development of the unfavorable factors are still expected to be weak, the demand recovery is weaker than the supply, with the large-scale equipment renewal and consumer goods trade-in and other policies landing, is expected to boost steel demand, good steel price trend.
https://www.stats.gov.cn/sj/zxfb/202404/t20240430_1955162.html
https://pmi.caixin.com/2024-04-30/102191791.html
2. China Iron and Steel Association: China's steel supply was stronger than demand in the first quarter
China Iron and Steel Association held an information conference on the 30th to introduce the operation of the steel industry in the first quarter. The China Iron and Steel Association said that the national crude steel output in the first quarter was 257 million tons, down 1.9% year-on-year. In the first quarter, the apparent consumption of crude steel in the country was 232 million tons, a year-on-year decrease of 4.7%. Overall, steel supply is stronger than demand. In the first quarter of this year, there were two factors for the year-on-year decline in efficiency, one was that supply exceeded demand, and the other was that the cost of raw materials rose sharply. This year, the output control measures of the five ministries and commissions will be further optimized and precise on top of the previous measures. In May, the market demand may be weak, the supply side may continue to rise, and the contradiction between supply and demand may be prominent again, which is bearish for the trend of steel prices.
https://www.cnfin.com/kx/detail/20240430/4043205_1.html
3. The fourth round of coke increase landed
On the 30th, the mainstream steel mills in Hebei and Shandong markets raised the purchase price of coke by 100 yuan/ton for wet quenching and 110 yuan/ton for dry quenching, which will be implemented from 0:00 on May 1, 2024. In the case of hot metal production continues to rise, the demand for coke, iron ore and other raw fuels has also rebounded accordingly, and its prices have risen sharply, and the support of steel costs has been enhanced, which is good for steel prices.
Second, today's steel market
1. Spot market
Today, the domestic steel market held steady and rose, and the trading volume declined.
2. The main force of futures
In terms of futures, as of the close, the main force of various varieties was mainly down.
3. Steel mill price adjustment
According to incomplete statistics, 11 steel mills adjusted the ex-factory prices of building materials today, of which 10 were raised and 1 was lowered, with a range of 10-50 yuan/ton. The details are as follows:
Raised:
1. Yangtze River: The price of thread and coiled snail was raised by 20 yuan/ton.
2. Laigang Yongfeng: The price of thread, wire rod and coiled snail was raised by 30 yuan/ton.
3. Masteel: The price of thread, wire rod and coil snail was raised by 20 yuan/ton.
4. Shougang Changzhi: the price of thread was raised by 30 yuan/ton, and the price of wire rod and coiled snail was increased by 50 yuan/ton.
5. Shanxi Gaoyi: The price of thread, wire rod and coiled snail was raised by 20 yuan/ton.
6. Meijin: the price of thread was raised by 30 yuan/ton, and the price of wire rod and coiled snail was increased by 50 yuan/ton.
7. Inner Mongolia Yaxin: The price of thread, wire rod and coiled snail was raised by 20 yuan/ton.
8. Tangshan Donghua: wire rod price increased by 10 yuan/ton.
9. Fushun New Iron and Steel: The price of thread was raised by 20 yuan/ton.
10. Zhongyang, Shanxi: the price of thread was raised by 30 yuan/ton, the price of wire rod was increased by 10 yuan/ton, and the price of coiled snail was increased by 50 yuan/ton.
Cut:
11. Yutian Jinzhou: The price of wire rod was lowered by 10 yuan/ton.
All adjustments are inclusive of tax.
3. Raw fuel market
Today's imported ore: the market price of mainstream varieties of imported iron ore is stable. Recently, the profitability of steel mills has improved, the average daily hot metal production has rebounded, and the demand for iron ore is better; on the supply side, overseas shipments continue to increase, and the arrival in Hong Kong has fallen, and the inventory continues to grow; the shipment in May is expected to be sufficient, and the upward momentum of iron ore is insufficient, and it is expected that the iron ore will fluctuate weakly after the holiday.
Today's coke: coke prices are running strongly, and the fourth round of increases will be implemented on May 1. Recently, the operating rate of blast furnaces in steel mills has continued to rise, the demand for coke has increased, coupled with the low inventory of some steel mills, the replenishment is not ideal, and the demand for replenishment before the holiday still exists;
Today's scrap steel: scrap prices held steady and fell, with a range of 10-70. Affected by the recent tax reform policy, the market wait-and-see continues to be strong; some steel mills have a large amount of scrap steel arrivals, and there is a phenomenon of car pressure; but the cost performance of scrap steel is gradually recovering, and the willingness of steel mills to use scrap is acceptable, supporting scrap prices, and it is expected that scrap prices will fluctuate in a narrow range after the holiday.
Today's billet: Tangshan Qian'anpu billet resources ex-factory tax reported 3460 yuan/ton. The price of the national billet market is mainly stable, the snail shock is weak, the price of downstream finished products is stable and rising, and the overall transaction is weak.
Fourth, Tao Xiaogang's point of view
Today's thread disc opened high and went low, and the main force of the wire rod hit the fall limit in the intraday. First, on the last day before the holiday, the funds left the market led to the overall decline of commodities; the second is that the "gold three silver four" has passed, the market believes that the steel market demand in May or weakened, and the current steel mills still have a certain profit, steel supply or a certain rebound, the market is worried that the contradiction between supply and demand or will be prominent again. Looking forward to the first week after the holiday, the fourth round of coke will be raised, and the steel cost support is strong; but entering the traditional off-season and paying for exports is facing investigation, steel demand may be weak; superimposed during the May Day holiday, the macroeconomic policy environment at home and abroad is also facing greater uncertainty, it is recommended that you remain cautious, and the old iron with goods in hand can continue to sell during the holiday. It is expected that steel prices will be weak and then strong next week, with a range of 50-80.
Information reference: National Bureau of Statistics, Xinhua Finance, Xiben Information, Lange Steel Network, My Steel, etc.
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