Steel industry welcomes “warm winter”

Since the beginning of November steel market prices continued to rise, the domestic steel market prices stopped falling and recovered, after the middle of a sharp rebound. At present, the high price of structural steel pipe is 4,850 tons in guangzhou market, much higher than the hot coil, ordinary cold rolling, galvanized market price. Steel plate in the end of the year in a wave of rising prices is the reason: domestic economic growth downward pressure increased, infrastructure support effect is obvious.The state has stepped up counter-cyclical policy adjustments, accelerated the implementation of infrastructure projects, and gradually tightened environmental protection. Affected by the environmental production limit in north China, the steel supply has been reduced, but at the same time, the domestic construction steel market inventory decline, the end of the infrastructure construction deadline, the real estate investment resilience is still in, resulting in a weak balance of steel market supply and demand.

round pipe

At present, the mismatch between supply and demand of China hollow section tube exists in the domestic construction steel market, which leads to the rebound of rebar steel market price. After entering October, all parties in the market agreed to short the market, accelerate the destocking, resulting in the current domestic market rebar steel inventory in the historical period low level. In addition to the factors of warm winter, construction projects in the northern region to speed up the construction schedule, to meet the deadline, so as to form the construction steel market supply and demand mismatch. According to the survey statistics, on November 21, the main domestic market rebar steel inventory of 2.9486 million tons, compared with the National Day after the reduction of 2.0838 million tons, is mild steel tube in the historical low inventory.

On the supply side, according to the statistics of the national bureau of statistics, the output of crude steel, pig iron and steel in October decreased by 0.6%, decreased by 2.66% and increased by 3.51% year on year respectively, and the average daily output decreased by 4.69%, 5.7% and 4.83% respectively compared with September. In October, although the production of bar bars and rebar in China maintained a rapid growth compared with the same period last year, the growth of sequential production has basically stagnated. Coil wire production fell significantly from the previous quarter, dragging down the overall supply of construction steel market.
Downstream demand side, although the industry is about to enter the low season, the current demand of square steel pipe still maintain a high level, inventory decline to a more ideal level. In the short term, the steel price is supported.

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Post time: Nov-26-2020
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