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After a few days of correction, the steel price once again exerted momentum on Monday. On the 27th, the average price of rebar in the country rose by nearly 100 yuan per ton. The average price of thread in each city was about 3700-3900 yuan / ton, and Guangzhou and other places exceeded 4,000 yuan / ton. The price of Tangshan Pu carbon billet is also stable at a high level of 3,300 yuan / ton. As of today's futures closing, hot coil, thread main contract rose 5.04% and 4.73%, respectively, to close at 3,728 yuan / ton and 3,612 yuan / ton. The main iron ore contract also rebounded 3.18% to 714 yuan / ton.
It is reported that last week's steel market inventory finally ended 12 consecutive rises, the first decline. According to statistics from the Xiben Shinkansen, as of February 24, the total inventory of steel products in the country was 16.48 million tons, a decrease of 0.62%. The current inventory level increased by 30.1% compared with the same period of last year.
Steel mills' steel inventories are falling faster. According to the statistics of 139 building materials steel mills in the country, the total inventory of building materials of steel mills nationwide last week was 3,756,100 tons, a decrease of 14.17% on a week-on-week basis and a year-on-year decrease of 11.40%.
Changjiang Securities believes that if the social inventory in the new week continues to decline, it indicates that demand for the peak season is still expected, and the possibility of falsification is expected to be further reduced. Otherwise, it is necessary to reposition the expected demand for this year. For the time being, there is no obvious evidence of falsification in demand expectations, and downstream demand is in the transition window or gradually released.
In addition, national environmental governance and capacity-removal actions are still continuing. On the 27th, the Ministry of Finance publicized the list of provinces and cities in 2016 to stimulate the production of steel and coal. In terms of steel, it is proposed to invite incentives to promote Zhejiang, Jiangxi, Guangdong and Fujian. All of the above four provinces completed the steel de-capacity task ahead of schedule in 2016. Among them, Zhejiang Province exceeded 28%. The major steel producing provinces of Hebei and Jiangsu are not on the list.
At the same time, this year's rectification of the "strip steel" has increased. Last Thursday, the China Iron and Steel Association announced the "Opinions on Supporting the Strike of "Ground Steel" and Defining the Use Range of Power Frequency and Medium Frequency Induction Furnace", and the first publicly delineated the scope of the intermediate frequency furnace. The crackdown on “strip steel” in various provinces across the country is also constantly advancing.
In terms of environmental protection, environmental protection and production in Beijing, Tianjin and Hebei are still continuing to ferment. The Ministry of Environmental Protection's first quarter 2017 air quality special inspection results report also involved illegal steel enterprises.
Qiu Yuecheng, a senior analyst at Xiben Shinkansen, believes that overall, the current domestic steel market inventory has officially transferred to the decline channel. With the arrival of the traditional consumption season, terminal demand will be further released. The continuous efforts to reduce production capacity and environmental protection have made the expectation of supply contraction still strong, and steel prices may still have a rising momentum in the short term. However, it is worth noting that the recent surge in steel prices has triggered government departments to strengthen price regulation, and the risk of high steel price adjustments is also gathering.