In September, the spot price of steel fell sharply. However, the ex-factory price of mainstream steel mills in October was still as expected: steady increase. After the market opened in October, the market continued to be weak in the previous period, and the ex-factory price will be introduced in next month. Is it still down? Or is it being pushed up by higher costs? I try to do some analysis, and continue to predict the changes in the situation, for reference only.
First, the macro 1, the international debt crisis in Europe increased, the euro weakened, the dollar strengthened, commodities fell sharply. Goldman Sachs said on September 30 that the probability of a recession in the euro at the end of the year is about 40% to 50%. The European debt crisis and other shocks have increased the possibility of economic recession. On October 7, Standard & Poor's announced that it lowered the rating of Dexia, a Belgium-France joint venture bank. On the same day, Fitch announced that it lowered the long-term sovereign credit ratings of Italy and Spain and rated the outlook for both countries as negative. In addition, the Bank of England’s Monetary Policy Committee finally kept the benchmark interest rate unchanged at 0.5% during the October (October 6) October meeting. As expected by the market, the central bank also expanded the scale of quantitative easing to £275 billion. The announcement of entering the second round of quantitative easing (QE2) era, which to a certain extent, slowed down the market's worries about the EU crisis.
In the United States, ADP’s private employment population was revised to increase by 89,000 in August, and the initial value was increased by 91,000. The data clearly brought positive sentiment to the market and boosted market confidence. The number of non-agricultural employment changes announced by the US Department of Labor in September increased by 103,000, which was significantly higher than the previous value and expectations. This has brought a bit of warming to the current harsh economic environment, which has buoyed the market.
2. In September, the HSBC China Manufacturing Index was still under the Qirong line, and new export orders showed an accelerated decline. In August, China’s macro data showed that economic growth slowed but remained relatively stable, and CPI fell slightly but remained at a high level. The tight monetary policy could not be relaxed.
Second, cost and profit Import mines, domestic mines have fallen. In September, the cost rose first and then declined. Iron ore lags behind steel prices in the late period of the second half of the year. The rate of domestic mines with larger increases in the early period has been adjusted first. As of October 9, Hebei refined powder (66%-Tangshan) was 1380 yuan/year. t, a sharp drop of 135 yuan/ton from the previous month. In terms of imported ore, the firm price has finally loosened. The price of 63.5% (wet)-Tianjin Port of Indian ore fines was 1,315 yuan/ton, a slight decrease of 35 yuan/ton from the previous month. The current decline in ore prices is still smaller than steel prices, mainly because domestic steel mills have not yet significantly reduced production.
The billet market continued to fall sharply. The international market continued to bear bad news. Commodities continued to plummet. The trend of falling steel products has not yet stopped. The market for billets as a market indicator has continued to maintain a downward trend. As of October 9, the price of Tangshan billet Q235 was 4,180 yuan/ton, down 280 yuan/ton from the previous month.
Scrap prices continue to fall. With the deepening of the adjustment of the steel market, more steel mills have reduced the purchase price of scrap. As of October 9, the average spot price of scrap 6-8mm was RMB 3,483 yuan/ton, which was RMB 74/ton lower than the previous month.
The profitability of steel products has deteriorated sharply, and some varieties have fallen into losses. The prices of iron ore, scrap, billet, etc. continue to fall, and steel production costs continue to decline. According to the MRI cost model, as of September 29, the average cost of rebar, plate, hot-rolled and cold-rolled steel declined slightly. 36 Yuan / ton. With regard to profitability, with the rapid decline in steel prices, except for cold rolling, all varieties generally began to suffer losses. The average profit margins for rebar, medium plate, hot-rolled and cold-rolled steel were -74, -101, -59, and 21 respectively. RMB/ton, which was 332,171,198,19 yuan/ton less than the same period of last month.
III. Supply and demand 1. Supply According to the statistics of the China Steel Association, the average daily average crude steel output in the middle of September was 1.919 million tons. Although it fell from the previous period, it was still at a high level. The market price of steel products plummeted and social stocks continued to increase. Some steel mills, such as rebar, hot-rolled steel, and medium-thick steel plates, have already entered floating-losing state. However, according to Mysteel's latest survey, there was no significant reduction in steel production during the National Day. According to news reports, Vale said that domestic iron ore purchases by steel mills are still relatively positive, and they are reluctant to make the final batch of production cuts because of the first reduction in output. Therefore, the current situation is extremely unfavorable for stabilizing steel prices.
2. Demand side According to the latest downstream industry data, the demand for steel products in the later period is difficult to improve. Although the construction industry has maintained a record high rate of housing starts, the pull effect on demand for long products has gradually weakened. The investment in fixed assets showed a good momentum of steady development, and the growth rate of investment in railway transport has fallen sharply. Sales of main products of construction machinery continued to show a negative growth year-on-year, a slight increase from the previous quarter and an improvement in the short-term. However, from the perspective of the slowdown in the downstream demand of machinery, the mid-term is still not optimistic. Exports of construction machinery increased year-on-year, and there were still more follow-up uncertainties. Anti-seasonal recovery in auto production, production and sales growth rate has stabilized and fell. The output of the four major home appliance products continued to show a seasonal decline, and the spillover effect of real estate regulation was gradually immersed in the home appliance industry. The stimulus policy faded, and the marginal effect of the stimulus to household appliances to the countryside continued to decline. The sales of home appliances to the countryside decreased year-on-year and the chain ratio showed signs of weakness. Global new shipbuilding prices fell, hand-held orders from major shipbuilding countries continued to decline year-on-year, and new ship deliveries continued to decline. China’s shipbuilding industry is in a difficult situation. According to the China Shipbuilding Industry Association, China’s completion volume continues to increase compared to the same period of last year, and the growth rate of new orders continues to decline significantly.
4. As shown in the table below, as of October 9th, the spot prices of steel products all showed a significant drop from the previous month, with hot rolled, medium plate, and rebar falling near the year's low point. return.
V. Although the manufacturer’s game had a slight decline in production in mid-September, the steel mills did not significantly reduce production during the National Day. In addition, due to the colder weather in the north, the demand for building materials weakened, and the Northland moved south, causing the inventory to keep rising. In the spot market prices fell sharply, raw material costs have shifted downwards, some types of steel mills are at a loss, but the steel mills are still reluctant to limit production insured prices.
The desire of traders to increase their shipments after the National Day has not yet been truly realized. Instead, they have been forced to sell off funds due to tight funding. Since the ex-factory price in October was still mainly stable, medium and small, and the market price has been falling all the time, traders have suffered serious losses. Some merchants have expressed careful consideration of the next year's annual agreement.
Conclusion: Under the background of the decline in spot prices, the prices of major steel mills in October are still stable, medium, and small, which is basically consistent with our previous forecast. Jin Jiubu Jin and Yin Shiyi hope that in the face of the international market crisis, the domestic economic downturn is expected to increase; the import ore retreat, the steel billet continues to drop sharply, the scrap purchase price is lowered, the cost is obviously loosened; the steel mill production during the National Day is basically normal, There was no sign of significant production cuts and stocks increased. Among them, the spiral was the strongest and the supply pressure remained unabated. The demand for construction steel, which accounts for half of the country’s steel production, slowed down, but the auto industry experienced a weak recovery. The international price was strong but it was difficult to achieve great results. The steel price in the domestic market accelerated in September; the steel mills may face a new wave of price cuts, and some traders are shrouded in the tragic cloud of funding. At present, there is no apparent rise or fall in the prices of the dominant steelmakers in November, which will be released in the form of flat and subsidy policies.
In summary, we believe that the mainstream steel mills' prices in November (listed) will be mainly stable, and individual varieties will have different margins. In terms of sub-categories, the hot-rolled and medium-plate price adjustment ranged from -100 yuan to 0 yuan/ton; the cold-rolling price adjustment ranged from -50 to 50 yuan; galvanization, color coating, or stabilization will be weak, and will not be too steep. Big. In addition, price cuts and subsidies for building materials are relatively obvious in the first half of the year. If the spot market continues to be in the doldrums, the price adjustment of building materials in mid-range will be mainly stable, small and medium-sized, ranging from -50 to 0 yuan/ton.
First, the macro 1, the international debt crisis in Europe increased, the euro weakened, the dollar strengthened, commodities fell sharply. Goldman Sachs said on September 30 that the probability of a recession in the euro at the end of the year is about 40% to 50%. The European debt crisis and other shocks have increased the possibility of economic recession. On October 7, Standard & Poor's announced that it lowered the rating of Dexia, a Belgium-France joint venture bank. On the same day, Fitch announced that it lowered the long-term sovereign credit ratings of Italy and Spain and rated the outlook for both countries as negative. In addition, the Bank of England’s Monetary Policy Committee finally kept the benchmark interest rate unchanged at 0.5% during the October (October 6) October meeting. As expected by the market, the central bank also expanded the scale of quantitative easing to £275 billion. The announcement of entering the second round of quantitative easing (QE2) era, which to a certain extent, slowed down the market's worries about the EU crisis.
In the United States, ADP’s private employment population was revised to increase by 89,000 in August, and the initial value was increased by 91,000. The data clearly brought positive sentiment to the market and boosted market confidence. The number of non-agricultural employment changes announced by the US Department of Labor in September increased by 103,000, which was significantly higher than the previous value and expectations. This has brought a bit of warming to the current harsh economic environment, which has buoyed the market.
2. In September, the HSBC China Manufacturing Index was still under the Qirong line, and new export orders showed an accelerated decline. In August, China’s macro data showed that economic growth slowed but remained relatively stable, and CPI fell slightly but remained at a high level. The tight monetary policy could not be relaxed.
Second, cost and profit Import mines, domestic mines have fallen. In September, the cost rose first and then declined. Iron ore lags behind steel prices in the late period of the second half of the year. The rate of domestic mines with larger increases in the early period has been adjusted first. As of October 9, Hebei refined powder (66%-Tangshan) was 1380 yuan/year. t, a sharp drop of 135 yuan/ton from the previous month. In terms of imported ore, the firm price has finally loosened. The price of 63.5% (wet)-Tianjin Port of Indian ore fines was 1,315 yuan/ton, a slight decrease of 35 yuan/ton from the previous month. The current decline in ore prices is still smaller than steel prices, mainly because domestic steel mills have not yet significantly reduced production.
The billet market continued to fall sharply. The international market continued to bear bad news. Commodities continued to plummet. The trend of falling steel products has not yet stopped. The market for billets as a market indicator has continued to maintain a downward trend. As of October 9, the price of Tangshan billet Q235 was 4,180 yuan/ton, down 280 yuan/ton from the previous month.
Scrap prices continue to fall. With the deepening of the adjustment of the steel market, more steel mills have reduced the purchase price of scrap. As of October 9, the average spot price of scrap 6-8mm was RMB 3,483 yuan/ton, which was RMB 74/ton lower than the previous month.
The profitability of steel products has deteriorated sharply, and some varieties have fallen into losses. The prices of iron ore, scrap, billet, etc. continue to fall, and steel production costs continue to decline. According to the MRI cost model, as of September 29, the average cost of rebar, plate, hot-rolled and cold-rolled steel declined slightly. 36 Yuan / ton. With regard to profitability, with the rapid decline in steel prices, except for cold rolling, all varieties generally began to suffer losses. The average profit margins for rebar, medium plate, hot-rolled and cold-rolled steel were -74, -101, -59, and 21 respectively. RMB/ton, which was 332,171,198,19 yuan/ton less than the same period of last month.
III. Supply and demand 1. Supply According to the statistics of the China Steel Association, the average daily average crude steel output in the middle of September was 1.919 million tons. Although it fell from the previous period, it was still at a high level. The market price of steel products plummeted and social stocks continued to increase. Some steel mills, such as rebar, hot-rolled steel, and medium-thick steel plates, have already entered floating-losing state. However, according to Mysteel's latest survey, there was no significant reduction in steel production during the National Day. According to news reports, Vale said that domestic iron ore purchases by steel mills are still relatively positive, and they are reluctant to make the final batch of production cuts because of the first reduction in output. Therefore, the current situation is extremely unfavorable for stabilizing steel prices.
2. Demand side According to the latest downstream industry data, the demand for steel products in the later period is difficult to improve. Although the construction industry has maintained a record high rate of housing starts, the pull effect on demand for long products has gradually weakened. The investment in fixed assets showed a good momentum of steady development, and the growth rate of investment in railway transport has fallen sharply. Sales of main products of construction machinery continued to show a negative growth year-on-year, a slight increase from the previous quarter and an improvement in the short-term. However, from the perspective of the slowdown in the downstream demand of machinery, the mid-term is still not optimistic. Exports of construction machinery increased year-on-year, and there were still more follow-up uncertainties. Anti-seasonal recovery in auto production, production and sales growth rate has stabilized and fell. The output of the four major home appliance products continued to show a seasonal decline, and the spillover effect of real estate regulation was gradually immersed in the home appliance industry. The stimulus policy faded, and the marginal effect of the stimulus to household appliances to the countryside continued to decline. The sales of home appliances to the countryside decreased year-on-year and the chain ratio showed signs of weakness. Global new shipbuilding prices fell, hand-held orders from major shipbuilding countries continued to decline year-on-year, and new ship deliveries continued to decline. China’s shipbuilding industry is in a difficult situation. According to the China Shipbuilding Industry Association, China’s completion volume continues to increase compared to the same period of last year, and the growth rate of new orders continues to decline significantly.
4. As shown in the table below, as of October 9th, the spot prices of steel products all showed a significant drop from the previous month, with hot rolled, medium plate, and rebar falling near the year's low point. return.
V. Although the manufacturer’s game had a slight decline in production in mid-September, the steel mills did not significantly reduce production during the National Day. In addition, due to the colder weather in the north, the demand for building materials weakened, and the Northland moved south, causing the inventory to keep rising. In the spot market prices fell sharply, raw material costs have shifted downwards, some types of steel mills are at a loss, but the steel mills are still reluctant to limit production insured prices.
The desire of traders to increase their shipments after the National Day has not yet been truly realized. Instead, they have been forced to sell off funds due to tight funding. Since the ex-factory price in October was still mainly stable, medium and small, and the market price has been falling all the time, traders have suffered serious losses. Some merchants have expressed careful consideration of the next year's annual agreement.
Conclusion: Under the background of the decline in spot prices, the prices of major steel mills in October are still stable, medium, and small, which is basically consistent with our previous forecast. Jin Jiubu Jin and Yin Shiyi hope that in the face of the international market crisis, the domestic economic downturn is expected to increase; the import ore retreat, the steel billet continues to drop sharply, the scrap purchase price is lowered, the cost is obviously loosened; the steel mill production during the National Day is basically normal, There was no sign of significant production cuts and stocks increased. Among them, the spiral was the strongest and the supply pressure remained unabated. The demand for construction steel, which accounts for half of the country’s steel production, slowed down, but the auto industry experienced a weak recovery. The international price was strong but it was difficult to achieve great results. The steel price in the domestic market accelerated in September; the steel mills may face a new wave of price cuts, and some traders are shrouded in the tragic cloud of funding. At present, there is no apparent rise or fall in the prices of the dominant steelmakers in November, which will be released in the form of flat and subsidy policies.
In summary, we believe that the mainstream steel mills' prices in November (listed) will be mainly stable, and individual varieties will have different margins. In terms of sub-categories, the hot-rolled and medium-plate price adjustment ranged from -100 yuan to 0 yuan/ton; the cold-rolling price adjustment ranged from -50 to 50 yuan; galvanization, color coating, or stabilization will be weak, and will not be too steep. Big. In addition, price cuts and subsidies for building materials are relatively obvious in the first half of the year. If the spot market continues to be in the doldrums, the price adjustment of building materials in mid-range will be mainly stable, small and medium-sized, ranging from -50 to 0 yuan/ton.
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