"After many years of not encountering, 'Golden Nine Silver Ten' has become 'Silver Nine Golden Ten', and this year is destined to be an extraordinary year." Yesterday, Zhang Yahui, chairman of Beijing China-Hong Kong Trading Co., Ltd., excitedly sent a message in the circle of friends. Many steel industry celebrities are also optimistic about the market in October this year.
First of all, let's review the steel price trend in October in the past 5 years. According to the monitoring data of Lange Steel Cloud Business Platform, in October 2017, the tertiary rebar (Φ25mm) in the top ten key cities in China rose by 83 yuan / ton; in October 2018, it rose by 186 yuan / ton; in October 2019, it rose by only 57 yuan / ton; in October 2020, it rose by 125 yuan / ton; and the overall market fluctuations in October in the past 5 years were small.
In October this year, the "opening red", the first day of rebar spot price increased by nearly 100 yuan, and today continues to maintain the rise. According to the monitoring data of Lange Steel Cloud Business Platform, on October 9, the average price of tertiary rebar (Φ25mm) in the top ten key cities in China was 5946 yuan / ton, a cumulative increase of 108 yuan / ton in two days, an increase of more than 1.85%. The gains of the first two days of October have surpassed the cumulative gains in October 2017 and 2019.
The recent continuous rise in steel prices is related to production restrictions. Since the end of last year, the Ministry of Industry and Information Technology and the National Development and Reform Commission have repeatedly emphasized ensuring that the national crude steel production will decline year-on-year in 2021. Recently, the Ministry of Industry and Information Technology once again stressed that the next step is to continue to do a good job in limiting crude steel production and implement differentiated peak production. It can be seen that the policy of reducing crude steel production this year has not slackened in the slightest.
The recent production situation also fully reflects this situation. In the first half of this year, steel production did not fall but rose, in the second half of the year, many places in the country issued more stringent production restriction policies, and the momentum of crude steel production was contained, and there was a month-by-month decline. According to the National Bureau of Statistics, crude steel production fell by 8.4% year-on-year in July and crude steel production fell by 13.2% year-on-year in August.
Lange Iron and Steel Research Center Director Wang Guoqing said that although the recent crude steel production has been a more obvious decline, but the cumulative crude steel production from January to August this year increased by 36.89 million tons year-on-year, and there is still a big gap with the pressure reduction target requirements, therefore, the crude steel production limit work will continue to be carried out steadily, superimposed autumn and winter air pollution prevention and control and Winter Olympics related activities, the decline in output in the later period has become a foregone conclusion.
On the demand side, although the current demand has not seen a more than expected growth, it has even weakened relatively due to the decline in demand in the manufacturing industry. However, with the arrival of the construction season in September and October, the demand for construction steel has formed a strong support. Overall steel demand continues to pick up.
In terms of inventory, according to the monitoring data of Lange Steel Cloud Business Platform, the social inventory of steel products fell for two consecutive months in August and September, with a cumulative decline of 2.073 million tons, a decline of 15.24%. The overall rate of decline reached its fastest rate in nearly five years. However, this week, the social inventory of steel has rebounded, ending the trend of "nine consecutive declines".
Finally, looking at the price of raw fuel, iron ore prices have recently rebounded slightly, supported by a sharp rise in freight rates and the demand for post-holiday steel mill replenishment. However, with the increase in the reduction of crude steel pressure, iron ore prices will return rationally, and it is difficult to continue to rise sharply. In addition, the current coke price has broken through the historical high, reaching 4160 yuan / ton, forming a strong support for steel prices.
For the later trend, Wang Siya, senior analyst of Lange Steel Network, said that crude steel production continued to be suppressed, although the demand was relatively poor, but the expectation still existed. Therefore, the fourth quarter will show a state of demand start-up and supply contraction, which will be conducive to the upward price.
Zhang Yahui, chairman of Beijing China-Hong Kong Trading Co., Ltd., also believes that the demand in the later period will continue to improve, while the output will continue to decline, and the market may appear to be tight in supply and demand, so the overall market in October will be strong. (Lange Steel Press Center Peng Cuiting)