Steel prices rose for a month

After the end of the three-month fall period, the domestic steel market ushered in a long-lost rebound. As of yesterday, the domestic steel composite index of the Nishijin Shinkansen Group has continuously risen for a month, with a cumulative increase of RMB 150/ton.

Analysts believe that the warming of the season, the recovery of steel demand, coupled with some steel mills due to loss of production to stop the market supply decreased, contributed to the rise in steel prices this round.

Steel prices have bottomed out since December last year and they have entered the "dropping" rhythm of steel prices, but in the near future there has been a tendency to recover.

According to statistics, from March 14 onwards, domestic steel prices have risen steadily. As of yesterday, the steel composite index closed at 3,450 yuan/ton, a month-long increase of 150 yuan/ton, or an increase of more than 4%. At the same time, steel social stocks have fallen for six consecutive weeks since March 6th. Average daily production of crude steel since March, every ten-year index has been above 2 million tons.

In the industry view, the rebound in the current round of steel markets is more due to seasonal factors. After the Spring Festival, the weather became warmer and the steel market moved into the traditional peak season of “Jin Sanyin IV”. Many downstream construction sites and projects were started and steel demand picked up. In addition, because of the loss and environmental protection factors that led to the suspension of production of steel mills, the supply of steel products in the market has also been slowed down, and the imbalance between supply and demand has eased, which has also helped the rebound of steel prices to a certain extent.

“The current overall market conditions are poor. Whether the upstream ore, coal, or downstream steel mills have fallen to the loss line, the market itself should also have a bottoming out.” Steel analyst Qiu Yuecheng said that after the Spring Festival, the economic downturn pressure, The central and local governments have frequently heard the news of "steady growth and slight stimulation" recently. The expectation of a stronger market for steel prices is another factor in price recovery.

Continued to rise "stressed"

In fact, after the rebound of steel prices in this round, the fundamentals of market demand have not fully improved, and the continued weakness of steel prices has become apparent.

According to the latest data released by the China Iron and Steel Association, from January to February this year, the major industries of large and medium-sized iron and steel enterprises in the country suffered a loss of 4.7 billion yuan, while in 2013, the main steel enterprises also earned a profit of 5.1 billion yuan, making it difficult for the industry to lose money.

At the same time, there are market analysis concerns, and a short-term improvement in earnings may stimulate companies' overweight production, and the increase in output will further aggravate the contradiction between supply and demand in the steel market.

“In fact, in the latter half of last week, the trading volume of the steel spot market has slowed down, and the buoyant market has started to oscillate back.” Qiu Yuecheng believes that with the traditional peak season of “Jin Sanyin IV” gradually ending, the future steel price will continue. Rising will be stressful. Once the steel price rises and pressures, traders will wait and see their attitudes increase, and the market and the spot market will be under pressure. "In the short term, the possibility of steel prices returning to shock is still relatively large."