Workers took the tools to the furnace mouth to check to ensure the normal gushing of molten iron.
Photo by Li Nanxuan
(Economic Observation) China's steel price rides on the "roller coaster" What is the market's follow-up trend?
China News Service, Beijing, May 29th. Title: China's steel prices ride on the "roller coaster". What is the follow-up trend of the market?
China News Agency reporter Ruan Yulin
After the "May 1st" holiday, China's steel prices surged all the way, and after rushing to the highest point in history, they turned like a "roller coaster" all the way down. What is the follow-up trend of the steel market that has experienced huge ups and downs?
Multiple factors affect the crazy skyrocketing of steel prices
Driven by demand, the price of imported iron ore, and the price of bulk commodities in the international market, the price of steel in the domestic market maintained an upward trend in the first quarter.
According to the China Iron and Steel Association, by the end of March, the China Steel Price Index (CSPI) rose to 136.28 points, an increase of 9.44% from the beginning of the year and a year-on-year increase of 37.37%.
After the "May 1st" holiday, the steel market is more like a wild horse, chasing up the market all the way, and steel futures and spot stocks have reached record highs.
According to the monitoring data of the Lange Steel Cloud Business Platform, on May 10, the national comprehensive steel price of Lange Steel rose to 6510 yuan per ton (RMB, the same below), a single-day increase of 6.9%, breaking the historical high in 2008.
It reached its highest point around May 12, in which rebar had a cumulative increase of about 2,000 yuan per ton, an increase of 44.4%; hot-rolled coils had a cumulative increase of about 2,150 yuan per ton, an increase of 47.6%.
“The steel market has reached a state of excitement and has entered a crazy stage. The rise continues to accelerate, and the rising slope is getting steeper and steeper,” said Wang Jing, an analyst at the Lange Steel Research Center. Repeatedly exceed expectations and continue to hit new highs.
The rapid increase in steel prices has caused some steel mills to reluctantly sell, traders hoard stocks, and market rushes, which has a greater impact on the production and operation of the steel industry and the stable development of the upstream and downstream industrial chains.
Regarding the reason for the recent surge in steel prices, Ge Xin, deputy director of the Lange Steel Research Center, said that it was mainly affected by various industry policies, such as the introduction of new capacity replacement plans, the adjustment of import and export policies for steel-related products, and regional environmental protection limits. Production policies are stimulating every nerve in the steel market.
At the same time, the apparent rise in the cost of raw materials has also given steel mills a reason to increase their ex-factory prices. The spot market has rapidly risen and continued to rise, driven by the futures market.
Policies are frequent, the steel market gradually returns to rationality
Since May 12, the State Council executive meeting has focused on the rise in commodity prices and raw material prices three times in succession. On the 26th, the State Council executive meeting pointed out that market-oriented methods should be used to guide the upstream and downstream supply chain to stabilize the supply of raw materials and coordinate production and sales to ensure stable supply. price.
Steel prices fell sharply in succession, and the futures market has now seen a cliff-like decline.
As of May 21, the quotations of some steel products fell back to the level before the "May Day" holiday or even lower.
According to the monitoring data of the Lange Steel Cloud Business Platform, on May 27, the average price of grade 3 rebar in the top ten major cities in China was 4,933 yuan per ton, which has fallen by about 1,300 yuan compared with the highest point, a drop of more than 20%; The price of rolled coils was 5,265 yuan per ton, a cumulative drop of more than 1,350 yuan, a drop of more than 20%.
On May 23, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other departments held a meeting to jointly interview key enterprises in the iron ore, steel and other industries, requiring relevant key enterprises to operate in an orderly manner in accordance with laws and regulations, and take the lead in maintaining the order of prices in the bulk commodity market. Don't hoard odds and drive up prices.
Resist vicious competition and call for industry self-discipline
The China Iron and Steel Association issued an industry self-discipline proposal on the 26th, calling for resisting vicious competition and promoting orderly development.
Luo Tiejun, vice chairman of the China Iron and Steel Association, emphasized that the price of raw materials including steel has risen sharply recently, and some downstream industries are under great pressure. The sharp rise in prices is likely to be accompanied by a sharp drop. The market trend in May fully illustrates this phenomenon. It has fallen back to the level before the "May 1st" holiday, but the price of raw materials has not dropped simultaneously, which is actually unfavorable for steel companies.
Luo Tiejun emphasized that the large fluctuations in steel prices are not conducive to the production and operation of steel enterprises, and it is also not conducive to the healthy development of downstream industries.
Iron and steel companies should also strengthen communication with downstream companies, innovate cooperation models, build a good ecosystem, and jointly promote the steady and orderly development of the upstream and downstream industrial chains.
Ge Xin said that steel prices have experienced a substantial decline, and cost support has gradually increased. There is still room for downside in the short term, but there are still uncertainties in policy.
Some analysts also said that from a market perspective, on May 27, the steel market ended six consecutive declines, futures prices rebounded, and the drop in spot prices narrowed. However, the market is unlikely to have a significant turn in the short term.
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