China's steel price will usher in a turning point in the middle and late third quarter! China's steel price will usher in a turning point in the middle and late third quarter!



Falling, deep falling, weakening... On the 20th, the price channels of major steel information websites were "falling". Since June, steel prices have continued to fall due to temperature, rainy season, macro situation and weak downstream demand.

Falling, deep falling, weakening... On the 20th, the price channels of major steel information websites were "falling". Since June, steel prices have continued to fall due to temperature, rainy season, macro situation and weak downstream demand.
After Baosteel and Ansteel, WISCO also announced the ex-factory price policy of its main products in July on the 17th. Except for the slight increase in the price of wire rod as construction steel, the price of other plate products was reduced across the line, with the largest reduction in the price of cold-rolled steel reaching 400-500 yuan/ton.
The reporter learned from the survey that the short-term steel price will continue to fluctuate and consolidate slightly. By the middle and late third quarter, with the improvement of the macro and demand, the steel price trend is expected to usher in a turning point.
Continuous small shock
"The price has been falling since June, and now it has dropped by about 200 yuan per ton." Peng Shuguo, general manager of Jinan Hengshunyuan Materials Co., Ltd., told the newspaper on the 20th that June is the wheat harvest season, and many migrant workers have to go home to harvest wheat, resulting in many enterprises in a semi-stop state.
At the same time, due to the high temperature in summer, many projects, especially outdoor work, have to stop. With the impact of the upper limit of electricity and the rainy season, the downstream demand for steel has decreased significantly. From the perspective of foreign countries, the price of international bulk commodity market has fallen sharply recently, and the international steel market has been weak. The export orders received by domestic steel mills in June and July have declined significantly compared with the previous months, and the export quotations have also declined.
"Now we can't borrow money from the bank. Some of them have reduced the amount of money. Some of them have paid the last time directly. The next time they won't lend money. The enterprise's capital turnover can't come over." Peng Shuguo said that compared with the usual, their shipments have decreased by nearly 1/3. At present, most dealers are waiting to digest inventory.
While demand is falling, supply is still strong. According to the latest data from the National Bureau of Statistics, the domestic crude steel output in May was 60.25 million tons, up 7.8% year on year, breaking the record of single month production. With the crude steel production hitting a new high, the national steel inventory has also recently increased for the first time since the beginning of March.
In the first ten days of June, the daily output of crude steel in China rose again to 1.96 million tons, which is the second highest production record after the middle of May, indicating that China's steel capacity is still fully released.
"As soon as June, the plate began to fall, and the rebar was better, and it had fallen for more than ten days." Peng Shuguo predicted that the steel market would be slightly shaken in the later stage, with 100-200 yuan of falling space.
Relevant data analysis shows that the domestic steel price fluctuated slightly last week. Compared with the previous week, the prices of hot rolled, cold rolled and medium plate decreased by 0.1%, 0.2% and 0.4% respectively, while the prices of deformed steel and wire rod increased by 0.2% and 0.1%. In terms of futures, rebar futures fell 0.3% month-on-month and wire rod futures rose 0.2% month-on-month.
According to the data of China Steel Price Network on the 20th, the domestic steel market is accelerating its decline. Among them, the construction steel market continued to decline, and the prices of hot rolled plates, cold rolled plates and medium and heavy plates all fell slightly.
Guarantee housing pulling
Analysts told the newspaper reporter that from the macro data, the added value of China's industries above designated size increased by 13.3% year-on-year in May, down 0.1 percentage points from April. "The continued decline in industrial added value indicates that the profitability of various industries, including the steel industry, is poor. In addition, the slowdown in the growth of downstream industries such as automobiles, household appliances and machinery will affect the demand for steel of relevant varieties, thus inhibiting the space for steel prices to rise."
In the short term, analysts believe that after June, the temperature in various places will continue to rise, and the construction project will be limited, which will lead to a reduction in the demand for building materials and inhibit the price rise. In the week of June 10, the social inventory of deformed steel bars rose for the first time after 14 weeks of decline, which also indicates that the demand for building materials has slowed down recently.
"Inflation pressure is still large in the short term, and the central bank may continue to introduce tightening policies, which will also form a pressure on the steel market." However, analysts said that in the second half of the year, as the short-term factors affecting food supply gradually disappear, and the cumulative effect of continued tightening monetary policy on the rise of non-food prices, inflation pressure is expected to gradually ease.
At the same time, the rapid growth of fixed assets investment and the centralized construction of affordable housing in the late third quarter are expected to further boost the demand for building materials, so the price of building materials in the late third quarter is expected to rise.
Li Xinchuang, Executive Deputy Secretary-General of the China Steel Association, said that with the continued progress of the construction of affordable housing in the second half of the year, the price of construction steel is expected to remain high. However, due to the impact of the decline in the growth of the manufacturing industry, the weak operation may continue for some time.
Analysts expect that in the short term, the steel market price will remain weak and volatile, the trend between varieties will continue to split, and the performance of long products will continue to be stronger than that of plates. In the medium term, after the steel price showed a weak performance in June and July, the middle and late third quarter will usher in a turning time window.