The weak steel prices continue to decline

The recent badness was gradually reflected in the market last week, with tight funding, ** plunging, and downward cost movements that have caused market sentiment to become unstable and mentality has turned cold, resulting in an overall decline in steel prices. However, from the perspective of varieties, the differentiation is very obvious. The varieties of building materials fell sharply, and the price of sheet resources remained stable. In some regions, there was still a slight upward trend. This is mainly due to the fact that with the change of weather, the construction work stoppages increased, and the north of Nancao transported, the southern market saw a passive increase in building materials inventory, traders increased pressure, while the increase in sheet metal inventory is relatively small, the market price is relatively strong.

Specific to the market, as of December 27, the transaction price of 8mm coils in Shanghai was RMB 3,450/ton, which was RMB 50/ton lower than the previous weekend; the transaction price of RMB 6.5mm was RMB 3,360/ton, compared with the previous weekend. Declined by RMB 20/tonne; the transaction price of Ф20mm rebar was RMB 3,440/ton, which was RMB 120/ton lower than the previous weekend; the transaction price of 5.5* 1,500 PWH coil was RMB 3,490/ton, up by 10% from the previous weekend. RMB/ton; 1.0*1250 Prairie transaction price was RMB 4260/ton, which was RMB 20/ton lower than the previous weekend.

Judging from the current situation, the recent domestic capital market has eased and inter-bank liquidity is relatively abundant. On the other hand, the stock market and the ** side repeatedly faltered last week, causing some panic. As Winter Storage entered the key operation node, traders lacked confidence and their willingness to sell goods was low. Market turnover was very low.

As far as the short-term market is concerned, we need to pay attention to the following two aspects:

1. The long-term market has stabilized demand. The current round of stock market crash has fallen from 2260 points in early December to 2100 points last week, which has fallen by more than 160 points. From the perspective of recent market performance, although the captain jumped, the overall decline momentum is not strong enough. At the same time, period snails fell from 3745 points to 3583 points last Thursday, and then gradually recovered, to close at 3612 on Friday, killing a lot of kinetic energy to be released. In other words, in the short-term, the possibility of a sharp drop in the long-term market will decrease, and the market will have a demand for a stable rebound.

2. Dongcun and North Materials are southwards. In terms of supply and demand, demand mainly depends on the condition of winter reserve stocks. From the current point of view, steel prices have fallen to lows during the year. Some steel traders, especially wet storage and short positions, have increased their willingness to purchase goods from the previous period, and supply has increased. It is mainly due to the arrival of North Materials and Nanfang Transportation. Although this year's northern steel mills have increased the amount and preferential treatment of East China market, with the decrease of regional price difference, the profitability of South-South resources has narrowed. The impact will also be limited. In terms of costs, although the prices of raw materials such as iron ore and steel billets have recently declined, the overall situation is still in a turbulent trend. In addition, environmental protection policy speculation, support efforts are still in place, and there is little room for a short-term decline.

In summary, after undergoing a sharp decline, the steel price has stabilized demand, and in the short term, the market will operate with shock consolidation, and gradually accumulate rebounding momentum.