On May 11, the steel spot market was mainly down, and the futures market, the main varieties of the main varieties fell on the night of the 10th. This week, steel prices are strong and then weak, the current steel fundamentals have not improved much, the fifth round of raw fuel coke is in doubt, and the steel price next week ...
1. Analysis of long and short factors
1. National Bureau of Statistics: CPI rose 0.3% year-on-year in April, and PPI fell 2.5% year-on-year
In April 2024, the national consumer price rose by 0.3% year-on-year; Month-on-month, it rose 0.1%. In April, the ex-factory prices of industrial producers fell by 2.5% year-on-year, and the purchase prices of industrial producers fell by 3.0% year-on-year, which were 0.3 and 0.5 percentage points narrower than that of the previous month. The ex-factory prices and purchasing prices of industrial producers decreased by 0.2 percent and 0.3 percent respectively from the previous month. Domestic demand is recovering, supply and demand conditions continue to improve, but consumer prices are still at a low level, and the industrial manufacturing industry is still under pressure, reflecting the lack of effective demand.
https://www.stats.gov.cn/sj/zxfb/202405/t20240511_1955442.html
2. The People's Bank of China released the "Report on the Implementation of China's Monetary Policy for the First Quarter of 2024"
The People's Bank of China released China's monetary policy implementation report for the first quarter of 2024 on May 10. Regarding the main ideas of monetary policy in the next stage, the report makes it clear that the People's Bank of China will maintain the soundness of monetary policy, enhance the consistency of macro policy orientation, strengthen counter-cyclical and cross-cyclical adjustment, increase support for the real economy, and effectively consolidate and enhance the positive trend of economic recovery. On the monetary side, easing is still the general direction, and there is a high probability that there will be RRR and interest rate cuts, which will boost market confidence and benefit steel prices.
https://www.cls.cn/detail/1673120
3. The product price policy of mainstream steel mills was introduced in June
In June, the ex-factory price of Baowu Steel Mill rose and fell on the basis of May, and the hot-rolled base price was raised by 50; The pickling base price was raised by 50; The base price of non-oriented silicon steel remains unchanged; The base price of general cold remains unchanged; In June, the base price of hot-rolled Q235B including tax was 5521 yuan/ton; The base price of cold-rolled DC01 including tax is 8372 yuan/ton; hot-dip galvanized DC51D+Z tax base price 8934 yuan / ton; Silicon steel 6039 yuan/ton (the above is the estimated price, the actual price list shall prevail).
Anshan Iron and Steel's product price policy in June 2024 will be adjusted as follows on the basis of the "May 2024 Product Price Policy": hot-rolled, pickled, galvanized, non-oriented silicon steel, medium and heavy plate, cold-rolled, etc., flat. Another: Saddle God high-strength line 590MPa, 780MPa, 980MPa and 1180MPa level flat; Rebar and wire rod were raised by 100 yuan/ton.
Benxi Steel's product price policy in June 2024 will be adjusted as follows on the basis of the "Product Price Policy in May 2024": hot-rolled, cold-rolled, electro-galvanized, pickled and other flat plates; Rebar and wire rod were raised by 100 yuan/ton.
Gold three silver four has passed, steel demand has basically peaked, some varieties of social inventory is large, steel mills are mainly to maintain the current market price, some varieties of tentative rise, the future just need to replenish the warehouse and export or the main direction of steel demand. The contradiction between supply and demand in the follow-up steel market may gradually accumulate, enterprises are more cautious in procurement, and the rising momentum of steel prices is not strong, which is bearish for steel prices.
Second, today's steel market
1. Spot market
Today, the domestic steel market is mainly down, and the trading volume has fallen.
2. The main force of futures
In terms of futures, all the main forces of all varieties fell on the night of the 10th.
3. Steel mill price adjustment
According to incomplete statistics, 12 steel mills adjusted the ex-factory prices of building materials today, of which 3 were raised and 9 were lowered, with a range of 10-90 yuan/ton. The details are as follows:
Raised:
1. Shagang: The ex-factory price of thread and coil snail price was raised by 50 yuan/ton.
2. Yonggang: The ex-factory price of thread, wire rod and coiled snail remains unchanged, and the 5-1 thread is 90 yuan, and the coiled snail high line is 90 yuan.
3. Zhongtian: The ex-factory price of thread, wire rod and coiled snail remains unchanged, and the 5-1 thread is 70 yuan, and the coiled high line is 60 yuan.
Cut:
4. Shi Heng: The price of thread, wire rod and coiled snail was reduced by 50 yuan/ton.
5. Laigang: The price of thread, wire rod and coil snail was reduced by 50 yuan/ton.
6. Inner Mongolia Yaxin: The price of thread, wire rod and coiled snail was reduced by 30 yuan/ton.
7. Tangshan Donghua: wire rod price reduced by 10 yuan/ton.
8. Yutian Jinzhou: wire rod prices were lowered by 10 yuan/ton.
9. Zhongyang, Shanxi: The price of wire rod was reduced by 10 yuan/ton.
10. Lianyuan Steel: The price of thread was reduced by 20 yuan/ton.
11. Xianggang: The price of thread, wire rod and coiled snail was reduced by 20 yuan/ton.
12. Guiyang Changle: The price of thread was lowered by 10 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 weak. The second quarter is the peak season for iron ore shipments, and the supply of iron ore has returned to a high level; Recently, steel mills have accelerated the resumption of production, giving support to mine prices; However, the follow-up steel demand or steady decline, in the context of rising costs, steel mill profits are expected to contract, hot metal production increment space or limited, iron ore supply and demand fundamentals will remain loose, iron ore prices are expected to fluctuate in a narrow range next week.
Today's coke: Coke prices are running stable for the time being. Recently, the transaction of finished products has been slightly weak, steel prices have weakened, and steel mills have greater resistance to the continued rise of coke; In addition, the recent slowdown in the rise of coking coal, the auction market sentiment has cooled, the bifocal disk has fallen, the market bullish sentiment has fallen, and this round of price increases may be difficult to land, and it is expected that the coke spot will temporarily stabilize next week.
Today's scrap steel: scrap prices are mainly falling, with a range of 10-30. Recently, steel prices have been weak, steel mills have average profits, and scrap steel has a low cost-effective advantage over molten iron, and the market bullish expectations have weakened; Considering the low amount of scrap resources and the low scrap inventory of some steel mills, it is expected that scrap prices will consolidate in a narrow range next week.
Today's billet: Tangshan Qian'anpu billet resources ex-factory tax reported 3460 yuan/ton. The price of billet in the national billet market is stable and weak, the night market of steel is green, the price of downstream finished products is stable and falling, and the overall transaction is weak, and it is expected that the price of billet will fluctuate in a narrow range next week.
Fourth, Tao Xiaogang's point of view
Affected by weak terminal demand, steel prices fluctuated and fell this week after rising on Monday. On the supply side, blast furnace molten iron continued to increase, and the output of most varieties of steel increased. In terms of raw fuel, due to the contraction of steel mill profits, the fifth round of coke price increase is pending, coupled with the decline in the disk, the market bullish sentiment has fallen, and this round of price increases may be difficult to land. Looking forward to next week, the traditional peak season of "Golden Three Silver Four" has passed, in the case of limited demand improvement, focusing on the change of inventory, if the pressure on both ends of supply and demand is large, steel prices still have downward pressure. Considering the strong macro expectations, it is expected that steel prices will be weak and then strong next week, with a range of 30-60.
Information reference: National Bureau of Statistics, Finance Associated Press, Xiben Information, Lange Steel Network, My Steel, etc.
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