1.Factors Affecting Steel Prices
Biden ordered the deployment of troops! Ukraine enters state of emergency, Russian embassy evacuated!
In the early hours of the 24th, Ukrainian President Volodymyr Zelensky signed an order recommending that the Verkhovna Rada (Ukrainian parliament) approve a 30-day state of emergency starting at 0:00 on February 24. Ukraine’s foreign minister said Russia was ready to attack and had a short time to stop that step. There are still opportunities for diplomacy, and the United Nations should act now.
Analyst’s opinion: As soon as the news came out, the European and American stock markets plunged rapidly, and the German DAX index, which had risen by more than 1%, quickly turned green. Affected by this, the black futures market also generally declined, and the main force of rebar fell the most. Taking into account the risk aversion factor, the bearish sentiment in the market is high, and the number of selling orders has increased in a short period of time, resulting in a rapid drop in prices, which in turn is beneficial to short-term steel prices.
Two departments talk about iron ore: high attention, severe punishment!
According to the news from the National Development and Reform Commission on February 23, in response to the recent general stability of the iron ore market supply and demand, the port inventory continued to rise to a multi-year high, but the price has risen sharply. The association and some port enterprises held a special meeting to study related work such as greatly shortening the free storage period of iron ore for trading enterprises, increasing the cost of port hoarding, preventing excessive hoarding, etc., and instructing port enterprises to urge iron ore trading enterprises to release excessive inventory and restore it as soon as possible to a reasonable level.
Analyst’s point of view: As the price is too high, and the demand has not met expectations, iron ore has once again become the focus of the country. It is expected that iron ore prices may usher in a policy peak, with limited upside, which will be negative for steel prices.
Crude steel output was released in mid-February, and output fell month-on-month
On February 24, in mid-February, key statistics iron and steel enterprises produced a total of 18.989 million tons of crude steel, 16.8358 million tons of pig iron, and 18.0902 million tons of steel. Among them, the daily output of crude steel was 1.8989 million tons, down 1.28% from the previous month; the daily output of pig iron was 1.6836 million tons, down 2.09% from the previous month; the daily output of steel was 1.809 million tons, down 0.06% from the previous month. The steel inventory was 16.9035 million tons, an increase of 49,500 tons or 0.29% over the previous ten days; a decrease of 643,800 tons or 3.67% over the same period last year.
Analyst’s opinion: Although steel inventories have increased from the first ten days, they are still at a low level year-on-year, indicating that demand is better than the same period last year. The decline in crude steel output and the reduction in the supply of steel raw materials may drive up raw material prices, thereby pushing up steel prices.
2. Market Prices
Steel prices fell mainly on the 24th
17 of the 24 rebar markets fell by 10-50, and the average price of 20mmHRB400E was 4,892 yuan/ton, down 21 yuan/ton from the previous trading day;
Among the 24 hot coil markets, 12 fell by 10-30, and the average price of 4.75 hot-rolled coil was 5,012 yuan/ton, down 6 yuan/ton from the previous trading day;
Nine of the 23 medium and heavy plate markets fell by 10-20, and the average price of 14-20mm common medium plate was 5,173 yuan/ton, down 6 yuan/ton from the previous trading day.
On the 24th, 17 steel mills adjusted their prices, of which: 10 were lowered, accounting for 58.9%, and the price adjustment range was 10-70 yuan / ton. .
Futures Steel opened higher and lower on the 24th, falling overall
Today, the main thread futures fell 138 to 4637, a decrease of 2.89%; the main hot coil fell 95 to 4804, a decrease of 1.94%; the main coking coal fell 12.5 to 2635, a decrease of 0.47%; the main coke fell 23 to 3391.5, a decrease of 0.67% ; The main iron ore rose 3 to close at 703, or 0.43%.
Steel price forecast:
Supply and demand: After the year, infrastructure will continue to develop, and the focus of real estate is still on affordable housing. The demand will be released steadily, which will benefit steel prices in the long run.
In terms of policy: The policy is still based on loose monetary policy, and the down payment ratio has been lowered in many places. In order to better destock and help the return of funds, it will also drive long-term demand.
In terms of cost: Affected by the state’s control of iron ore and other raw materials, it began to fall off a cliff late yesterday, and today the two departments put pressure on iron ore again, the room for improvement is limited, and the price of iron ore in the short and medium term may fall, which will further benefit. Air short-term steel prices.
In addition, the deterioration of the situation in Ukraine and Russia, which in turn affected the capital market to favor safe-haven financial products, the short-selling sentiment in the futures market was high, which further put pressure on short-term steel prices and was negative for steel prices.
Therefore, steel prices fell mainly.
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Post time: Feb-26-2022
