Post-holiday steel price correction is difficult

Since entering into January, the price of section steel is like sitting on a slide. It has been all the way to the bottom. It is expected that the pull-up in January will also melt into a bubble. In such a tragic market, how will the profiled steel be interpreted later? Can the price turn back? What will be done as a steel trader?

Raw material billets are still difficult to get out of trouble after a long period of time. Steel billets started to fall in mid-December, and the holding of January will have a good start, but the market is always counterproductive. From December 30, 3040 yuan / ton to the current 2,820 yuan / ton, a total of 220 yuan, a single fall in January totaled 160 yuan, the momentum of decline in January was more violent, compared to 3280 yuan / ton in the same period last year, 2014 The performance of the opening steel market in 2008 made some glasses drop. As of January 23, the mainstream stockpiles of Tangshan billets were 666,000 tons. In January, 187,000 tons were put into storage. In January 2013, the mainstream storage stock was 431-104 million tons, and the amount of stocks entering the warehouse was 610,000 tons. . As of the 23rd, the operating rate of rolling lines in the billet rolling mill was about 20-30%, which has dropped to a low point.

From the inventory of steel billets and the rate of operation, we find that this year is at a low level compared with previous years. However, the prices have been difficult to be reckoned with, and the mind is inevitably full of doubts. What are the reasons? First, the purchase volume of the downstream billet mill can be reduced from about 20 days to about 10 days, and it adheres to the principle of current use. Years ago, many steel mills had a volume of steel billets ranging from 5000-13,000 tons, which could be used for 3-4 days. And the price of finished products is also falling all the way due to unsatisfactory transactions. Steel mills are more flexible in the way of reducing stocks and selling at low prices. Inverted trading is the mainstream. Second, the capital is tight. This is more obvious in steel mills and big customers because of cash flow. However, merchants with a willingness to purchase can only be discouraged. Third, they are in a state of mind. Due to the loss of stocks in the same period of last year, this year, each household has a kind of attitude that “has been bitten by snakes for ten years”. Therefore, in February, the billet still has a rising end, and the rebound rate is extremely limited. After all, the downstream operating rate is not high, and the purchase of billets is relatively limited. Tangshan billet operation space is in the range of 2830-2870 yuan/ton.

It is difficult for the steel rider to make a difficult callback. The prices in January 2014 were significantly lower than those in the same period of last year. Last year saw a steady upward trend in the market, but this year it is contrary to the fact that the steel markets that have bottomed out have caused the market to have no festivities for the Chinese New Year. Merchants are more worried. Tangshan 5 angle fell from the 3260 yuan on the 1st to the current 3140 yuan, which fell 120 yuan; in the same period last year it increased by 130 yuan. The Lancang region also showed a downward trend. Dongshan 10-14 Slot fell to 3,190 yuan on the 1st at 3,370 yuan, which was a cumulative decrease of 180 yuan. The Wushao 5-cornered fell by 100 yuan to 3,270 yuan. At present, except for small steel plants that cannot produce steel billets, production and production are suspended, and other large plants are still in production during the Spring Festival. According to Zhuochuang Information, the factory inventory produced during the Spring Festival can increase by 10,000-15,000 tons, while the inventory of other Tangshan small factories that are discontinued is maintained at 7,000-16,000 tons, which is generally at a normal level.

The reasons for the difficulty in rebounding the price of steel products are as follows: 1. Although inventory levels are relatively flat, it is worth noting that the downstream operating rate cannot be opened immediately after the year, and the downstream purchases are slightly less active. Second, the funding side is still in a state of tension. The bank’s control of the steel industry is still strict, and it does not rule out that merchants will initiate sales of low-cost return funds.

In summary, the trend of pulling up after the year will not change, and it is expected that the pull-up trend will appear at the end of February or early March, with an initial range of 50-100 yuan. With the gradual start-up of the downstream, the purchase volume and prices have risen. Of course, steel mills and merchants are looking for strong psychological growth. As the saying goes, "The long-term decline will rise," and the market will continue to fall. The market has been buzzing. After the year, "Jin San Yin Si" also pulled up. However, Zhuo Chuang Information suggests that before the 15th of the lunar month, the market will not increase its willingness to pull up. It is recommended that merchants be cautious in selling and purchasing; at the same time, their mentality should also be flat and they should pay more attention to macroeconomic policies after the year.