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CISA: LATE STEEL PRICES CONTINUED TO SHOW A NARROW RANGE OF FLUCTUATION TREND

2016/8/11 12:50:06      

July, the domestic market demand for steel is still relatively weak, although the crude steel production has decreased, steel exports have increased, but the market oversupply situation has not fundamentally changed, steel prices continue downward. Early August steel prices rebounded slightly, is restricted by the contradiction between supply and demand, the late steel prices difficult to rebound sharply, will narrow amplitude fluctuation.
First, the domestic market continued downward steel prices
7 at the end, the iron and Steel Association CSPI China steel price index for 62.73 points, down 3.96 points, a decline of 5.94%, an increase of 0.78 percentage points from the previous month, down 28.93 points, a decline of 31.56%.
1, long wood, sheet prices have continued to decline, the plate fell more than long
7 at the end, CSPI long material index for 63.46 points, down 3.04 points, a decline of 4.57%; sheet index for 62.35 points, down 4.97 points, a decline of 2.81, 7.38% percentage points higher than the long material decline. Compared with the same period last year, the long material index fell 29.18 points, a decline of 31.50%; sheet index fell 30.88 points, a decline of 33.12%.
2, the main varieties of steel prices continue to decline
7 at the end of the month, China's Steel Industry Association, the eight varieties of steel prices have continued to decline. Which hot rolled coil, cold-rolled sheet and galvanized sheet QoQ larger, respectively, a decrease of 220 yuan / tons, 241 yuan / ton 187 yuan / ton; wire, screw steel, angle steel, hot-rolled plate and seamless tube price chain fell relatively small, respectively, a decrease of 59 yuan / ton, 72 yuan / tons, 122 yuan / ton, 146 yuan / ton and 130 yuan / ton.
3, steel prices overall downward, decline in late July decreased
From the week of July, the first two weeks of steel prices continue to fall, a slight rebound in the third week, the first four weeks and somewhat back. Which rose slightly after two weeks of long material. August 2 weeks before the steel prices rebounded slightly.
Two, domestic market steel price change factor analysis
In July, despite the decline in crude steel production, steel net exports increased, but due to the weak domestic market demand, the market is still showing oversupply situation, steel prices continue to show a downward trend.
1, with the steel industry growth rate down, the steel market demand is not flourishing
According to data from the National Bureau of statistics, 1-7 months, the national investment in fixed assets (excluding rural households) an increase of 11.2%, the growth rate than the 1-6 month down 0.2 percentage points, down 5.8 percentage points over the same period over the previous year; the national real estate development investment grew by 4.3%, 0.3 percentage points lower than in June, year-on-year drop over the same period of 9.4 percentage points. New housing construction area fell by 16.8%, a decline of expanded 1.0 percentage points; purchased land area of real estate development enterprises fell by 32.0%; in July, the above scale industrial increase value increased by 6.0%, down 0.8 percentage points higher than in June, growth over the same period last year fell 3.0 percentage points. From the overall situation, the macro economy continues to withstand downward pressure, steel market demand is not flourishing.
2, the apparent consumption of crude steel continued to decline for more than to seek contradictions intensified
According to the National Bureau of statistics data, in July the national pig iron, crude steel and steel (including repeated material) production was 57 million 330 thousand tons, 65 million 840 thousand tons and 92 million 300 thousand tons, respectively, down 4.8%,
4.6% and 1.9% average daily crude steel production was 2 million 124 thousand tons, a decrease of 174 thousand tons, down 7.6%. According to customs statistics, in July the country exported 9 million 730 thousand tons of steel, 1 million 50 thousand tons of imported steel, net exports of 9 million 10 thousand tons of crude steel equivalent. According to the above data, in July the domestic market crude steel apparent consumption of 56 million 830 thousand tons, a decline of 6.7%, a decline of 5.8 percentage point increase over the previous month. Crude steel apparent consumption fell 3.1 percentage points higher than the output decline, the market oversupply situation has not changed.
3, imports of iron ore prices rebounded, the role of steel price support has increased
According to the iron and Steel Association, in July, imports of iron ore (customs) prices rose for the second consecutive month, the chain rose 4.29 U.S. dollars / ton, an increase of 7.36%. Other varieties of raw material prices have declined. The domestic iron ore prices by up to turn down, annulus comparing fell 49 yuan / tons, a decline of 8.83%; coking coal prices continue to decreased 15 yuan / tons, a decline of 2.14%; metallurgical coke prices continue to decreased 39 yuan / tons, a decline of 4.70%; scrap prices continue to decreased 124 yuan / tons, a decline of 9.02%. Imported iron ore prices rebound, the role of steel prices have increased.

Three, the international market, steel prices continue to decline
July, CRU international steel composite price index for 129.6 points, down 1.2 points, a decline of 0.9%, a decline of 0.3 percentage point increase over the previous year, down 36.1 points over the same period last year, a decline of 21.8%.
1, long, sheet prices continue to decline
July, the CRU long material index to 1.443, chain fell 1.2 points, a decline of 0.8%; CRU price index sheet 122.4 point, chain fell 1.0 points, a decline of 0.8%. Compared with the same period last year, long timber index fell 32.4 points, fell to 18.3%; plate index decreased 37.8 points, a decline of 23.6%.
2, North America, European growth narrowed, Asia fell to increase
(1) North American market
July, CRU North American steel price index for 137.7 points, up 0.9 points, an increase of second, 0.7% consecutive months of rising. July, U.S. manufacturing PMI was 52.7%, down 0.8 percentage points. The new orders rose slightly, the stock index fell; by the end of 7, the United States crude steel capacity utilization rate of 73.6%, down 6 percentage points. By the early impact of steel prices, the main varieties of this month the U.S. Midwest steel mills factory price steadily.
(2) the European market
July, CRU European steel price index for 147.2 points, up 0.1 points, an increase of 0.1%, 0.5 percentage points lower than the previous month. July, the euro zone manufacturing PMI index was 52.4%, up 0.2 percentage points. In the main eurozone countries, Germany's manufacturing PMI was 51.8%, annulus comparing rises 0.3 percentage points; Italy was 55.3%, annulus comparing rises 1.2 percentage points; France was 49.6%, annulus comparing flat; Spain was 53.6%, annulus comparing fell 0.9 percentage points. Affected by the slowdown in demand growth in summer, the German market this month, in addition to steel prices from falling to rise, other varieties of steel prices have declined.
(3) Asia market
July, CRU Asia steel price index for 115.1 points, down 3.1 points, a decline of 2.6%, an increase of 0.1 percentage points from the previous month. In July, the Japanese manufacturing PMI chain increased 1.1 percentage points, but the new export orders index dropped 1.8 percentage points; South Korean manufacturing PMI was 47.6%, which the new export orders index was 47.8%, still in the 50% level; China's manufacturing PMI was 50.0%, annulus comparing fell 0.2 percentage points, which the new orders index was 49.9%, annulus comparing fell 0.2 percentage points. This month the Far East market steel prices continue to decline, in which the long material price decline narrowed, plate and strip price decline has increased.

Four, the late steel market price trend analysis
With the steady growth of national policy measures to gradually show the effect of steel demand will increase. But due to the oversupply of contradictions restrict, the late steel prices difficult to rebound sharply, is expected to show a narrow range of fluctuation trend.
1, with the gradual implementation of the steady growth measures, steel demand situation will be improved
At present, China's economy is in a special stage of the three period, the economic development into the new normal. Although the growth rate has slowed down, but the economy has not changed for a long time to improve the fundamentals. From the fourth quarter of last year's monetary policy adjustment, the liquidity moderately relaxed, effect will be more apparent in the second half of the year; a large number of public infrastructure and related construction projects landing, funds are mainly concentrated in the second half of the year; environmental protection project resources, urbanization will also continue to promote the coordinated development of Beijing Tianjin Hebei; and the Yangtze River economic belt the strategy of gradual landing, and "The Belt and Road" project will also continue to promote. With the steady growth of policy effects are emerging, steel demand situation will be improved.
2, oversupply situation has not changed, it is difficult to rebound in steel prices
According to data from the National Bureau of statistics, 1-7 month national crude steel output reached 4.76 million tons, down 1.8%; 5443 million tons of net exports of steel, equivalent to 5649 million tons of crude steel, an increase of 34.1%; domestic crude steel table apparent consumption of 4.2 million tons, down 5.2%, compared to the decline in crude steel output high 3.4 percentage points. Steel demand in the international market is also weak growth, according to the International Steel Association statistics, the first half of the world's crude steel production of 8.13 tons, down 2%, if the deduction of China is down 2.8%. In addition to a slight increase in the yield of the EU, the United States, Japan and South Korea production fell by 8.6%, 4.7% and 4.9%, respectively, significantly higher than china. Asian market is our country's main export destination, with the Asian market prices continue to fall, as well as the increase in trade friction cases, the difficulty of China's steel exports will be increased later. In the market oversupply situation has not changed the situation, the latter is difficult to rebound in steel prices.
3, steel stocks continue to decline, the market is expected to rise
At the end of July, the major markets nationwide steel social inventory fell to 11.68 million tons, the fourth consecutive monthly decline, a decrease of 118 million tons, a decline of 9.16%; and last year compared to the same period dropped 1.26 million tons, a decline of 9.73%; according to the iron and Steel Association Xunbao statistics, member enterprises in late July steel inventory for 15.12 million tons, down 14.86% compared to the end of June, continuous for a second month decline.
Late market need to focus on the main issues:
First, the crude steel production decline, supply and demand will be eased. July crude steel production in the country decreased by 174 thousand and 300 tons, down 7.58%; by the Anti Japanese War victory parade and other activities, is expected to 8-9 month crude steel production will be reduced, the market supply and demand contradiction will be eased.
Two steel prices rebound, the latter is still difficult to rise sharply. According to Steel Association monitoring, as of mid August, CSPI steel price composite index rose for two consecutive weeks, but smaller. Supply is greater than the demand for basic constraints, the late steel price is difficult to rise sharply.
Three is the oversupply of iron ore market, the price rebound trend is difficult to continue. According to Steel Association monitoring, July 1st to 8, CIOPI imported iron ore prices fell to 45.13 U.S. dollars / ton; after July 9th gradually rebound, to August 13th has risen to 56.61 U.S. dollars / ton, up 25.44%. As demand weakened, the iron ore market is also in oversupply situation, is expected to rebound in the price of iron ore price is difficult to continue.