Steel prices rebounded in the panic

In the recent round of macro negatives, there is a lack of market confidence. However, after the steel prices have fallen sharply, the reduction in steel production is expected to increase, and the current inventory pressure has also eased significantly compared to the beginning of the year. At the same time as the ore price rebounded, various steel products also rebounded in varying degrees. Quotes.

The mine price rebounded and the mine speculated that the bargain hunter's bargain hunter's plucked into the market as early as June. The imported iron ore market prices experienced a steep decline at the end of May and a wide range of volatility in the range of 110-120 USD/ton, especially at the weekend (6). On 15-16th of the month, the price of billet in Tangshan has risen by RMB 50/t, which has led to a slight rebound in the price of ore in recent days.

According to the business agency price monitoring, as of June 21st, the average price of 63.5% Brazilian coarse meal at the port was 894.38 yuan per ton, which was 18.23% lower than the average of 1093.75 yuan per ton during February 21; The average price of 62% printing ink was 845 yuan/ton, which was a drop of 20.51% from the high of 1,063 yuan/ton during the year of February 21; the average price of 62% PB of the port was 855 yuan/ton, compared with February 21 Compared with the high of 1,063 yuan/ton during the year, it has dropped by 21.56%; and the current price of 62% in the outer disk market is maintained at around 120 US dollars/ton, compared with the historical high point of 180-200 US dollars/ton, compared with international iron ore. The drop in prices has greatly affected the international mines' confidence in the future earnings of enterprises. The mining giants such as Rio Tinto, FMG, and Vale also sold debts owed by non-primary companies and even the main assets before repayment.

According to statistics from the business community, the globalORE platform transaction on June 19 showed that the platform continuously saw 5 transactions of 885,000 tons of 62% Australian powder, and the transaction price gradually climbed from US$119.5/ton to US$121/ton. Tuo Lima released a plan for bidding 165,000 tons of PB powder, and will close the bid at 13:30 pm on the 20th. Affected by this spot platform, the Platts 62% index rose by $2.75 on the 19th, and the current 62% iron ore index was US$120/ton, which was US$110.75/ton from the Dragon Boat Festival, up by US$9.25/ton.

He Hangsheng, chief editor of the business club's steel division, believes that the ore market itself is in a rally. The same grade of ore is traded for five consecutive times. It is apparent that some people are speculating on ore and gradually increasing the ore price to take advantage of the steel price.

According to statistics from the business agency's inventory, as of June 14, 2013, the total inventories of imported mine ports at major ports throughout the country were 71.94 million tons, which is about the average demand of Chinese steel companies for one month. Inventories fell by 1.06 million tons from the previous week, a week-on-month decrease of 1.45%, but increased by approximately 5.36 million tons compared to the year's low of 6.54 million tons on March 8. According to the announcement of the Chinese iron ore spot trading platform, the trading volume of the spot platform in May was only about 820,000 tons, which was a substantial drop from about 2.351 million tons in March. The above data shows that although the average daily average crude steel output reached a record high of 2,190,900 tons in early May, the port inventory has risen for two consecutive months, indicating that the actual consumption of imported ore in April and May has spiked back down.

Business Society mineral analyst Lu Gang believes that the recent intention to import ore speculation is obvious, the mine has a tendency to stabilize the price of ore, compared with the average domestic ore price last month of 132.9 US dollars / ton compared to the recent low price of 110 US dollars / ton On the advantage of the market, combined with the expected demand from the steel mills, the market will inevitably raise expectations. However, the downstream demand for domestic steel products is low and inventory pressure is serious. The iron ore market in July may fall again.

Coal coke steel industry chain two-level differentiation market is confusing From the coal coke steel industry chain, the recent coal coke prices are in decline, while iron ore and rebar rebounded in contrarian, prices mixed. According to the business club price monitoring, coking coal prices have already experienced new lows as early as May. The current price of coking coal is confusing, the prices of fat coal and main coking coal are around RMB 1,180/ton, gas coal is around RMB 1,000/ton, and the actual transactions are discounted. The major coal companies have different prices; coke also fell below the 2012 low this week, at around 1232 yuan/ton. The average market price of rebar is 3,236.15 yuan/ton, which is a 0.55% increase from the price on the 17th. The price rebounded slightly over a week.

From the perspective of coal enterprises, it is currently near the cost line, but from the perspective of the market, on the one hand, facing high market inventories, coal prices are forced by the market to ease the pressure on inventory and market demand. On the one hand, in the face of downstream coking and low enthusiasm for steel purchases, coal companies have kept high stocks. Some coal companies are producing according to orders, and while controlling production, they still have to go for price reduction.

From the standpoint of steel companies, the market price of rebar is still upside down. Although the current price rebounded, the 7.84 million tons of social inventories fell for 13 weeks, still higher than the same period of last year; and its own steel factory The frequent downward adjustment of the price has brought the market down expectation, and the market outlook is still difficult to really reverse.

The rebound in the iron and steel industry’s upward trend in prices has been a surprise. According to the price survey of the business community, there were 9 kinds of goods in the iron and steel sector in the 24th week (6.17-6.21) commodity price rise/fall list in 2013. The top 3 commodities were Iron ore (Indian) (3.36%), HRC (0.98%), Medium Plate (0.60%). There were four kinds of goods that fell month-on-month, with the top three products being stainless steel (-1.19%), seamless (-0.93%), and galvanized (-0.21%). This week's average increase and decrease is 0.33%.

From the price point of view, the decline in the market has clearly improved compared to last week. Individual commodities have rebounded under the lead in the rise in ore prices and billets, and the market looks like “prosperous”.

However, according to the latest data, the monthly crude steel production in 2013 rose from 63.622 million tons in January to 6.7 million tons in May. In the first half of June, the daily output of crude steel of key enterprises was 1.731 million tons, up by 1.3% from the previous month; the national average output of crude steel was estimated to be 2.156 million tons, which was an increase of 0.1% from the previous month. The reduction in output of steel mills is less than expected, implying that demand for ore from steel mills has stabilized. With high-yield production, the number of days available for ore stockpiles in steel mills has now dropped to 24 days, or there may be a need for restocking, but it is difficult to significantly increase demand again.

From the social inventory point of view, according to the business community monitoring, as of June 14th, the total inventory of major varieties nationwide was 1760.75, down 232,500 tons from the previous week, a decrease of about 1%. Although the number of inventories has fallen for 13 consecutive weeks, there is still a high gap of 1.7 million tons compared to the same period of last year. Inventories are still under pressure and the market outlook is not optimistic.

The monetary tightening of steel mills may be difficult until the end of June 19, Shanghai discount rate rose to 5.85 ‰ / month, compared with May 31 3.8 ‰ / month, up nearly 54%, tight liquidity The degree is evident, steel mills are afraid of raw materials purchase supplement, the rebound in ore prices is limited, the short term is expected to not exceed 130 US dollars / ton, and the probability of a larger decline in the market outlook, the decline depends on the market's recognition of the rebound.

Therefore, in summary, the business club He Hangsheng believes that the depressed steel industry is in urgent need of market catalysts to reverse the market, and the recent mining speculation of rising ore prices and Hebei's environmental protection measures under the Tangshan billet rise have all prompted steel traders to raise their quotation. To ease the pressure of continued price inversion and decline; however, the increase in prices is directly caused by the shrinking market transactions and the reduction of spot specifications, and the lack of steel price rise momentum, and the price rebound may be a flash in the pan. In late June, the steel market continued to remain weak.