Can't go up or down the status quo of Chinese steel prices

In the recent week, the domestic steel spot market basically remained stable, prices were weak, and the overall turnover was still not good. In addition, the long-term price continued to oscillate, and the business mentality was difficult to improve. Although the inventory of some varieties of the market is still in decline, but the overall pattern of weak demand is difficult to change. At present, the holding cost of steel resources in the market is relatively high, and the price policy of steel mills remains high, which gives some support to the bottom price of the market, and there is little room for market correction.

According to the analysis, except for the slight increase in the prices at the bottom of the Northeast region, the domestic construction steel market is basically in the path of weak exploration. On the whole, the prices in the northern market have been significantly lower than those in the southern market. Considering the arrival of cold weather in the later period, the demand will gradually become lighter, and there will be room for further slight price drop in the northern market. However, as the northern region enters the winter, market resources may flow into the southern region, which in turn will bring certain inventory pressure to the southern market. Of course, the fundamentals of the current market are good, the supply of the steel market is reduced, inventory is declining, and raw material prices are firm, all of which play a certain role in supporting the market price.

Although the domestic hot-rolled coil market did not break away from the shock, the bottom of the market was slightly stronger under the influence of cost support. There are merchants in the market reflecting that it has entered the year of December, and it is the end of the year. According to conventional banking credit, there will be a gradual tightening situation. The pressure on the funds in the later period may increase, and it does not rule out that the market appears to be in a low position because of the capital relationship. 'The phenomenon.

The overall domestic cold rolling market is stable. At the beginning of the week of the week, due to the dull market transactions, the price has seen a narrow pullback. By mid-week, driven by the increase in prices of electronic and electronic disks, the prices of cold-rolled coils have been tentatively rising in some areas, but the prices After hanging up, merchants face greater sales resistance, and the market is underpowered. Market participants expect that the cold-rolling market will face the dual pressure of high costs and unsatisfied demand in the latter stage, or will continue to narrow the trend of consolidation.

According to estimates by institutional analysts, the weak demand in the steel market and the unclear role of external factors will continue for some time. At the same time, the overall pressure of market inventories is not large, and the cost support is also relatively strong. It will also be “accompanied by”, and the steel market's tangled market will be hard to see.

At present, the stalemate of steel prices “can't go up and falls down” will continue. There will be no fundamental change at the end of the year, and the whole market will not have much improvement. 'This is Ren Qingping, vice president of the Shanghai Steel Trade and Commerce Association and general manager of Shanghai Wubo Steel Structure Materials Co., Ltd., accepting the forecast of the steel market in the late when interviewed by the reporter of Jiuzheng Building Materials Network.

During this time, Ren Qingping visited many senior executives of upstream steel mills and downstream terminal industries to investigate the operation of the steel market and master a large amount of first-hand information. He said to the writer that the recent ups and downs in prices in the steel market, which are “not up or down”, are very obvious and have become a major feature of the steel market this year.

Then why did the stalemate of steel prices “go up and fall?” In this regard, Ren Qingping said that the fundamental reason for the rise in steel prices is the lack of market demand. Recently, the state has frequently introduced a series of macroeconomic policies, such as the regulation of the real estate industry, to curb excessive growth in housing prices. Also, to prevent inflation, lower prices, the central bank raises interest rates continuously, and bank funds tighten; The further manifestation of the implementation effect of the adjustment policy directly affects the downstream industry's demand for steel products.

Ren Qingping pointed out in particular that while the strength of steel products in the downstream industry is weakening, there is still a cause for serious concern. Currently, almost all industries have the problem of excess capacity, not just excess capacity in the steel industry, but upstream and downstream. The industry is facing a severe situation in which the economic efficiency has declined or even lost. At present, the iron and steel industry under the dual pressure of the low price of steel products in the domestic market and the rising cost of steel production has significantly reduced the profitability of the company.

In July, large and medium-sized steel companies realized profits of only 2.86 billion yuan, a decrease of 76.62% compared with April. Since August, profits have remained low. According to statistics, the sales profit rate of large and medium-sized steel companies from January to October was 2.8%, the lowest in July was only 1.16%, which was lower than the average profit level of the national industrial industry. From January to October, 10 out of 75 large and medium-sized iron and steel enterprises across the country suffered losses, the loss reached 13.3%, and the loss amounted to 3.031 billion yuan. In the fourth quarter, the loss of a group of steel companies was a foregone conclusion. Facing difficulties in production and operation.

Ren Qingping then introduced the profitability of the downstream industry. He said that as a major manufacturer of steel, this year's production and operation situation is sluggish. The profit margins of mechanical manufacturing, shipbuilding, and household electrical appliances are all declining, and the profits of the shipbuilding industry are decreasing. The rate is only 3%. Many companies in the machinery industry have still suffered losses so far. For example, Shanghai has a large port manufacturing company and is still at a loss. The severe situation in which the downstream industries face excess production capacity, reduced profits, and even losses, this is an ominous sign for steel traders.

“Today, the upstream steel mills faced by steel traders, due to severe overcapacity and low profitability, will suffer large losses in the fourth quarter. Obviously, steel mills cannot consider the interests of steel traders.” Ren Qingping said: “Again, steel In the vast downstream industries that traders face, they are also unable to make any money, and some are still losing money.Thus, it is difficult for steel traders to obtain a piece of profit from the downstream terminal industry. They also hope that the lower the price of steel, the better. As far as possible, manufacturing costs are reduced as much as possible. Then, steel traders sandwiched between the upper and lower reaches cannot rely on each other, so the days of steel traders are getting worse."

Ren Qingping said that it is precisely because of the overcapacity and the declining benefits of the large steel users. This not only reduces the demand for steel products, but also weighs on steel prices, which largely curbs the domestic steel market price. rise.