How much did the price of steel go up? What caused the rise? What's the future trend?
Since May, the rapid increase in steel prices has aroused the attention of many people.
How much did the price of steel go up?
What caused the increase in steel prices?
What impact will its rise have on related industries?
What will happen to steel prices in the future?
Faced with a series of problems, let's first go to the market to see how much steel prices have risen.
This is the Beijing Lange Steel Consulting Company. Here we can see the quotations of various regional steel markets across the country. From the graph of the past three years, it is obvious that the increase in steel prices in the first five months of this year once again hit a record. new highs.
Ma Li, Chief Analyst of Lange Steel Consulting Company: After
May Day, the price increase is indeed very rapid. Whether it is a regular day, whether it is a steel mill or the market, there will be two or three price increases, and even more than five or six times a day. The second price increase, the highest day, the price in some areas can rise more than 500 yuan.
The last time the price was high was in 2008, and this year it has broken through the highest point in history.
The analyst told reporters that as of mid-May, the average price per ton of steel for the eight major varieties in the national steel market exceeded 6,600 yuan, nearly 400 yuan higher than the 2008 peak of 6,200 yuan, and an increase of 2,800 yuan per ton over the same period last year. The year-on-year increase was 75%, and it rose by nearly 900 yuan in early May alone.
In terms of varieties, the rebar per ton has risen by 1,980 yuan from the beginning of the year, and the hot-rolled coil has increased by 2,050 yuan per ton from the beginning of the year.
During the interview, the reporter found that international steel prices also rose in tandem with domestic steel prices, and the increase was much higher than domestic steel prices.
Wang Guoqing, Director of the Research Center of Lange Steel Consulting Company:
International prices are higher than our domestic prices. It will drive our domestic exports and even increase our domestic prices.
According to data from the World Steel Association, in mid-May, the price of hot-rolled coils per ton of steel mills in the Midwest of the United States was US$1,644, which is equivalent to RMB 10,570/ton, which is RMB 4,800 higher than that of the Chinese market. The price per ton is US$1226, which is also RMB 2,116 higher than the Chinese market.
According to the data provided by the China Iron and Steel Association, China's steel price index has risen by 23.95% from the beginning of the year. In the same period, the international steel price index has risen by 57.8%, and the price of steel in the international market has risen significantly higher than the domestic price.
Global crude steel production in the first quarter increased by 10% year-on-year
What is the reason for such an increase in steel prices?
In the production workshop of Hebei Jinan Iron and Steel's medium and heavy plate, a batch of new plates have gradually left the production line after the last process.
The person in charge of the company told reporters that their product sales have been improving since the beginning of this year.
Liu Wenbo, Vice President of Jinan Iron and Steel Group:
Our medium (thick) plate products are widely used in shipbuilding, bridge construction, machinery manufacturing and other industries.
Since the beginning of this year, as the market situation has improved, product sales have been booming. In addition to satisfying domestic market sales, they are also exported to the Middle East or South America.
The reporter's data from the China Iron and Steel Association shows that since the beginning of this year, my country's economy has continued to recover steadily, and steel demand has increased significantly, of which the construction industry has increased by 49% and the manufacturing industry has increased by 44%.
In the international market, the global manufacturing PMI continued to improve. In April, the PMI reached 57.1%, which was above 50% for 12 consecutive months.
Zhang Longqiang, Dean of the Metallurgical Industry Information Standards Institute:
Including domestic and foreign countries, especially the global economic recovery, China and the United States, which account for 40% of global GDP, have relatively good economic development data in the first quarter. China has increased by 18.3% year-on-year, and the United States has increased year-on-year. 6.4%, the rapid economic development will inevitably drive the growth of downstream demand and drive the growth of the market.
The recovery of the global economy has stimulated the growth of world steel consumption. In the first quarter of this year, the growth rate of global crude steel production has changed from negative to positive, with 46 countries achieving positive growth, compared with only 14 countries last year.
Statistics from the World Steel Association show that in the first quarter of this year, global crude steel production increased by 10% year-on-year.
Quantitative easing policy, commodity prices rose across the board
Speaking of rising steel prices, there is another special reason related to the epidemic.
In 2020, in order to respond to the epidemic, various countries around the world have introduced various stimulus policies to support economic development. Due to the excessive currency exchange of the US dollar and the euro area, inflation has intensified and transmitted and radiated to the world. Commodity prices rose across the board.
Li Xinchuang, Chief Engineer of the Metallurgical Industry Planning and Research Institute:
Steel is the most important basic industry, and any changes in it are the result of macroeconomic stimulus. The inflation brought about by the global loose currency and loose finances has caused the price of all raw materials to be reduced. rise.
Li Xinchuang said that the United States has launched a super-loose monetary policy since March 2020, and a cumulative rescue plan of more than $5 trillion has been put on the market. The European Central Bank also announced in late April that it would maintain a super-loose monetary policy. Support economic recovery.
Due to inflationary pressures, emerging countries have also begun to passively raise interest rates.
Affected by this, starting from February, the global prices of production materials such as grain, crude oil, gold, iron ore, copper, and aluminum have risen across the board.
Take iron ore as an example. On May 12, the CIF price of imported iron ore rose from US$86.83/ton last year to US$230.59/ton, an increase of 165.6%.
Under the influence of iron ore prices, all major steel raw materials including coking coal, coke and scrap steel have all risen, thereby further pushing up the cost of steel production.
Build an effective transmission mechanism to ensure reasonable and stable prices
Regarding the adverse effects of rising prices of bulk commodities, the relevant state departments attach great importance to them. On May 19, the State Council executive meeting proposed to do a good job in ensuring the supply of bulk commodities and stabilizing prices, curbing unreasonable price increases, and working hard to prevent consumer prices from being charged. Conduction.
On May 20, various types of steel products in the national steel market declined, with a decrease of more than 10%.
Experts said that under the guidance of policies, it is necessary to build an effective price transmission mechanism to ensure reasonable and stable prices throughout the industry chain.
Sorting out the entire industrial chain, steel is a downstream product of iron ore. At the same time, it is also an important raw material for downstream industries such as automobiles, home appliances, machinery, shipbuilding, and real estate. This year, taking iron ore as an example, the increase has exceeded 165 %, much higher than the 75% increase in steel prices.
Affected by rising commodity prices, downstream end markets have begun to come under pressure.
In April this year, the ex-factory price index of industrial producers rose by 6.8% year-on-year.
Li Xinchuang, Chief Engineer of the Metallurgical Industry Planning and Research Institute:
Promoting the healthy development of downstream industries is also the mission of the steel industry.
Therefore, to make the entire industrial chain of the steel industry reasonable, from our upstream steel itself and the downstream steel prices to reasonable prices, we need to build an effective price transmission mechanism for the entire industrial chain.
In addition to increasing the level of domestic iron ore production, it is also necessary to increase the recycling and utilization of scrap steel. At the same time, steel production enterprises should increase effective supply under the condition of green and low carbon, so that prices can return to reasonable levels.
Li Xinchuang said that in the future, with the slowdown of the macroeconomic pull of the economy, the market demand side will return to reasonable, as the domestic and foreign price gaps gradually shrink, the export tax rebate adjustment policy will gradually take effect, domestic supply will increase, and the price of steel will increase. It will gradually return to a reasonable range.