China’s ferrous steel futures have generally risen sharply, and steel prices may rise strongly.

China’s Tangshan billet rose above 5100, iron ore plunged 4.7%, and steel prices may go up and down.

  • On August 5, the domestic steel market mainly rose, and the ex-factory price of Tangshan billet remained stable at 5,100 cny/ton.
  • As the market expects that the work of reducing crude steel output in various regions continues to advance, the steel futures market has seen a repair rebound, and domestic demand in the off-season is difficult to continue to improve.

8.05

  • On the 5th, the main force of futures rebar opened higher and lowered. The closing price of 5373 rose 0.26%. DIF and DEA both fell. The third-line RSI indicator was located at 39-51, running between the lower and middle rails of the Bollinger Band.

0805期货

Raw material spot market

Coke:

  • On August 5, the coke market operated stably. On the supply side, coking basically maintained the previous production level, and production was difficult to increase. The limited production of some coking plants in Shanxi led to a decline in operating rates, and the commissioning of new production capacity was also delayed.
  • The Shandong area basically maintained the level of limited production at the end of July. Recently, coking coal has risen further, and the profitability of coking is average. On the demand side, the overall demand for coke from steel mills has rebounded, and the inventory should be increased appropriately.
  • The steel mills in Shandong are relatively strict in restricting production, and some steel mills have ended their coke ovens and resumed production;
  • A small number of steel mills in Jiangsu have started overhauling blast furnaces, and most steel mills are producing normally, and demand for coke is relatively strong.
  • In the short term, the coke market is stable and strong, but the increase is limited.

Scrap steel:

  • On August 5, the scrap steel market price remained stable. The average scrap price in 45 major markets across the country was 3266 cny/ton, an increase of 2 cny/ton from the previous trading day. Recently, the supply and demand of scrap steel has shown a two-weak pattern. With futures rebounding and finished product prices stabilizing, the scrap steel market, which has few resources, has temporarily strengthened. The market receipt price has fallen with steel mills to a certain extent, and goods yards and traders ship shipments. The pace is accelerating, and the receiving mentality tends to be cautious.
  • It is expected that scrap prices may stabilize on the 6th.

 

Steel market forecast

  • Looking back at the steel market in July, the overall trend of turbulence and upward movement appeared.
  • Entering August, the off-season is about to pass, and the reduction of crude steel production in various places is moving from expectations to reality.
  • How do steel mills respond? How does the steel market go in August?

Core point of view:
             1. Some steel mills have made preparations or plans for output reduction. Steel mills must not only ensure profits but also ensure that the output is not higher than the same period last year. In terms of the variety structure, they will be more inclined to reduce the production of relatively low-profit varieties, so construction steel will be the goal of reducing production in the next period of time.
             2. Most steel experts believe that the steel market is expected to fluctuate strongly in August, but it is necessary to pay close attention to the implementation of policies.

  • On the supply side: this Friday, the output of large varieties of steel products was 10.072 million tons, an increase of 3,600 tons on a week-on-week basis. Among them, the output of rebar was 3,179,900 tons, a decrease of 108,800 tons on a week-on-month basis; the output of hot-rolled coils was 3.2039 million tons, an increase of 89,600 tons on a week-on-month basis.
  • In terms of demand: the apparent consumption of large varieties of steel this Friday was 9,862,200 tons, a week-on-week decrease of 248,100 tons.
  • In terms of inventory: this week’s total steel inventory was 21,579,900 tons, an increase of 209,800 tons on a week-on-week basis. Among them, the steel mill inventory was 6,489,700 tons, an increase of 380,500 tons on a week-on-week basis; the social inventory was 15.09,200 tons, a decrease of 170,700 tons on a week-on-week basis.
  • Policy: Shanxi Province plans to reduce crude steel output in 2021. Except for some companies that have reduction tasks, the rest of the iron and steel companies use the 2020 statistical data as the assessment base to ensure that crude steel output this year does not increase year-on-year.


Post time: Aug-06-2021