Adjustment As The Main Building Steel Weak Preganglionic
As the Spring Festival of factors, the recent spot market demand for construction steel has been very limited, some business because of tight liquidity, or reduce the risk for the control of inventory, prices moderate reduction, making the overall market prices continue to test a low; but supported by the high costs, or slowing Last week, major decline in the 30-80 yuan / ton, individual market fell 100 yuan / ton; but the whole, the price drop also failed to make significant improvement in turnover. On the other hand, with the lower prices, the current market price and margin upside down steel prices increasing, businesses are not willing to lower prices to large, is now generally dominated wait and see.
Futures market, the thread pre-1005 contract low of 4250 to be first-line support and prices have stabilized, but subject to weak fundamentals and the recent tightening of funds side effects of long upside fatigue, the overall range of shocks to maintain momentum.
Week before the Spring Festival, the penultimate week, the site will come holiday, traders will also be the main collection, the market turnover will be more limited, the market will be in a price-free city, state, expect the market will be weak order for the Lord.
Inventory pressures continue to increase
At present the construction of steel stocks has been a continuous 10 weeks Masukura, the current stock has hit a total amount of the highest level since 2009, and this inventory growth trend still continues. Last week (as of January 29), the nation’s major cities rebar inventories 5.24403 million tons, an increase 170.44 thousand tons last week; wire stocks 1.35025 million tons, increasing 70.13 thousand tons last week. Building business on the steel market has begun to change the mentality. Prior to distribution business has been very actively accumulating inventory optimistic and mainly due to iron and steel production costs and liquidity of the two is expected to loose. However, the current situation is that the cost of steel production has been high signs of loosening, market liquidity also tends to adjust the premise of rising steel prices have changed. Those who hoard goods reluctant sellers on the market began to decline to honor the phenomenon of selling began to increase. This means that high inventory will be a growing pressure on the market significantly.
Market demand continues to slump
Close to Chinese New Year, Chinese New Year holidays, although the national legal only 7 days, but the building materials market from early February there will be the company gradually began to leave, while the post-holiday market at least a week time to basically return to normal trading status. This means that the market in February, more than half the time in the not fully operating condition. Meanwhile, in February across the lunar calendar in December and January, sales would have been expected in the year, the level of the lowest valley. Steel market during this period even if there is Change, “is more of a symbolic” of the State has a price-free city, state, there is little real sense to speak of. Postganglionic steel lack of a clear upward momentum, after a brief steady decline, or will be inevitable; the same time, in January have been released as part of the market price risk, post-holiday decline in steel prices will not be too drastic. Overall, the time period around the Spring Festival, the market price will continue the consolidation of vulnerable situation.
Raw material prices pulled back slightly on
Last week, the domestic market weakness Tie Jingfen run. Northern Tie Jingfen market inquiry has been weakened, south Tie Jingfen market was steady weakening trend, overall turnover was not as good. Because some provinces and cities in North China policy implications of the implementation of restrictions on electricity use, leading to disruption of local ore mining, was forced to stop production and so on. Tie Jingfen from the local understanding of the market, the winter Tie Jingfen market is basically affected by the weather, lack of capacity utilization, coupled with restrictions on electricity use in North China region in some areas the impact of mineral production enterprises are unable to operate Tie Jingfen resources are very tight market, both supply and demand see mood heavy.
Affected by the weakness in steel prices, imported ore market continues weak run, the current port spot high-grade resource constraints, some big price is not right to make adjustments, and some of the small traders of cargo are shipped as soon as possible to lock in profits, so the current market price confusion, thinly traded. In addition, as pre-shipments of large mines in India, despite the decline in demand of domestic steel mills, mining is also not inclined to cut prices, but rather to wait and see posture, as of now 63.5/63% fine ore mine bid for 127-129 U.S. dollars / ton.
Coke last week, the market was weak and stable operation of the basic trend of a marked turnover of light, prices have emerged in decline. Recent steel market has been in a weak prices of all varieties are in decline, while the coke, ore and other raw material prices still high, steel mills profit margins smaller, the recent weather, transportation and smooth, steel mills no worries about the coke transport, thus strongly reduce the Coke purchases in order to suppress coke price. According to market understanding, the recent Shanxi, Hebei coke price has begun to slightly decline, the current rate of 50 yuan / ton, the market price of no change in the mainstream, large-scale coke price reduction should occur in the near future.
During the period before the Spring Festival, the market demand declined significantly, inventory, and financial pressure gradually increased and steel price adjustment is more cautious, merchants pushing mentality has faltered, steel lack of upward momentum, but the recent price decline has been greatly the release of the price risk, not much room for steel prices continue to callback is expected in February to adjust the market will remain weak trend. However, with the peak season in March after spending the arrival of new investment projects, mainly infrastructure, will continue strong growth, accompanied by the demand-driven real estate investment is expected to reproduce the upward trend in steel prices.
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