August 1, steel ushered in a “good start” market. One rebar spot price rose more than 100 yuan, back to 4200 yuan above the mark, is the biggest one-day rise since the middle of July. Rebar futures prices also hit 4100 points today.
According to Lange Iron and Steel cloud business platform monitoring data shows that on August 1, the average price of three grade rebar steel (φ25mm) in the top ten key cities in China is 4208 yuan/ton, up 105 yuan/ton compared with last Friday. On August 1, the last rebar futures main contract shock rose, closed at 4093 yuan/ton, up 79 yuan/ton, or 1.97%.
After the empty steel prices continue to go up
Since the second quarter, in the domestic COVID-19 epidemic more sporadic, demand continues to be weak, the Federal Reserve interest rate and a series of negative factors under the disturbance, market pessimism continues to spread, steel price has entered the down channel, so far the highest point to the lowest point of the year, steel price has fallen more than one thousand yuan per ton.
At present, with the gradual improvement of the epidemic in China, the removal of traffic restrictions and the further improvement of the national epidemic prevention and control measures, the impact of the epidemic on market demand has been significantly weakened.
At the same time, the Federal Reserve in July to raise interest rates by 75 basis points is expected, and the Fed chairman Powell’s speech was interpreted by the market as the release of “dovish” signal, so the US stock market, the US bond market rebounded strongly, which also led to the strong rise in the price of domestic black futures.
With the gradual realization of a series of negative factors in the early stage, the current steel market has basically passed the most “dark” period, the market sentiment has been significantly improved, it can be said that the negative is good. As a result, recent steel prices have continued to rise. Half a month, the rebar futures price rose 504 yuan/ton, the spot price also appeared 329 yuan/ton.
Steel city environment will be further improved in August
Entering August, the high temperature and rainy weather will gradually abate, and the impact on outdoor construction will also be reduced, which will lead to the gradual recovery of steel demand. At the same time, the recent regular session of the State to continue to expand the effective demand policy measures for deployment, and require local quality and quantity to accelerate the progress of projects, to ensure that construction sites do not stop work, the relevant industrial chain, supply chain uninterrupted, in the third quarter to form more physical workload.
In addition, the country recently introduced the relevant real estate stability policy, some areas are introduced “rotten end building” solution. This includes the real estate industry stability maintenance and financial enterprises docking exchange meeting held in Hangzhou at the end of July. This will play a certain role in the repair of market sentiment, is conducive to steel demand to continue to improve.
In terms of output, the operation rate of blast furnace continues to decrease after the spontaneous reduction of steel plant in the early stage. According to Lange steel cloud business platform monitoring data shows that on July 28, the country’s main iron and steel enterprises blast furnace operating rate is 75.3%, down 0.8 percentage points from last week, down 5.1% from the same period last year; At present, the blast furnace operating rate of major steel enterprises in China has shown “seven consecutive drops”, a cumulative decrease of 7.1 percentage points. This shows that steel production has been in a state of continuous contraction since June.
However, it is worth noting that at the end of July, with the sharp decline in raw material prices, domestic steel mills have been reducing the loss range, and some steel mills have turned a loss into a profit. As a result, production resumed at some mills at the end of July. But from the current overall situation, even if the profit has recovered, the output is difficult to rise rapidly, so there will be a certain increase in output but the overall pressure will not be too big.
As expectations grow that domestic steel mills will resume production, feedstock prices will also rebound. In late July, in addition to coke prices, iron ore and steel scrap prices also showed a small rebound. The price of iron ore at Rizhao Port was 790 yuan per ton on August 1, up 70 yuan per ton, or 9.72%, from last Monday, according to data from Lange Steel Cloud Business Platform. The price of scrap steel in Tangshan was 2,640 yuan per ton, up 200 yuan per ton, or 8.2 percent, from last Monday. And raw material prices in the later period there is room to continue to rise, the steel price will form a certain support.
Lange steel network senior analyst Wang Siya said that the current market in the context of stage supply and demand mismatch, futures rebound trend continues to promote steel spot prices continue to go up and spot transaction increment, forming a volume price resonance rise. In some areas of the week to introduce environmental protection limited production news, but due to unstable incremental demand, later need to pay attention to whether the steel price has continued to rise, do not exclude the possibility of repeated price shocks.
Post time: Aug-02-2022