Chilly weather in the north than in March commendable performance in the domestic steel market. In the new call is expected to again raise the annual iron ore, ore stock soaring, steel price adjustment, good long-term market expectations and driven by the many positive efforts, the main varieties of steel pull up across the board, including spiral, thermal paper, the board significant gains, thus lifting the price level, many species have been breakthroughs in August last year, the high point. It is noteworthy that, after continuing for weeks after pulling up, plus steel price adjustment was temporarily paragraphs, some varieties of adjustments in the end market. Also support and promote a positive factor for the current round of price increases have been declining, the remaining area of macroeconomic policy uncertainty will continue to restrict the operation of the market. But so far, upward trend in steel prices did not break the rigid support costs significantly Moreover, the market is expected to remain broadly favorable market outlook, exports are also zoom, Steel City still have the upside may be adjusted.
Full pull-up steel prices in March
By factors such as the Spring Festival holiday, the February anomalies depressed steel market, the market rose the heart of hope, very urgent. Entered March, crude oil futures prices for commodities, led by gains representation, the first station NYSE crude oil futures above the 80 dollar mark. At the same time, a gradual improvement in domestic steel demand, the cost of support, steel price adjustment and market steel prices expected to bring up factors such as favorable to light, thus giving rise to a wave of steel market rally, monthly cumulative increase of up to 650 yuan / ton ( see Table).
Looking back in March the price trend is not difficult to find significant cost-push effect. After the Spring Festival, the annual international iron ore negotiations on the new call rate increased again, up to 90-100%, cash positive pull mine up, prices continue higher, Tianjin, Hong Kong and India has risen 63.5% iron ore fines from 120 to 1150 yuan, or 11%. Consider consolidation of the coke high price, two threads full manufacturing cost close to 4,000 yuan / ton. A direct result of price increases of raw materials costs, while enhancing the confidence of the market pull up, then drive steel prices rise in step with the market.
In addition to cost-push beyond, steel Tiaojia is higher steel prices to another important factor. As we all know, steel price increase means the cost of business increase orders is to stimulate the market to pull up the important factor. In March, in addition to Baosteel cold rolled products to the April accident out flat, while the other major steel price increases have a cumulative adjustment in general to 200-600 yuan / ton. It is clear that steel price adjustment stimulate or accelerate the price increases of the action, the Hebei Iron and Steel Group two Diaojia directly pushed the North thread, wire rose, Baosteel hot rolled Diaojia news has also led to pull up the heart of business.
Of course, this month, rising steel prices and demand is also expected to improve and market are inseparable. With the end of the Spring Festival holiday and the temperatures rise, the major steel industry one after another on the right track, demand simultaneous amplification, social stock started to slide in mid-March is a strong proof. Expectations for the role of market prices can not be ignored, because it directly determines the pull-up business confidence and methods.
Finally should be noted that the month the overall stability of macroeconomic policy aspect, as the steel city run provides a good macro environment. Although occasionally raising the deposit reserve rate hike or rumors, but in March the whole surface is more stable macroeconomic policies, the central bank to increase the intensity of the open market withdrawn from circulation, the net capital return that month reached 600 billion yuan, up quite ready to freeze the funds rate by 1% volume, not only play a tightening of liquidity around, and a decrease of monetary policy on capital markets.
April is expected to adjust the front line of Steel City
Continued to pull up over the past few weeks, the main varieties impressive gains, the price level was on the move, The thermal paper, plate and cold plate Deng has reached or exceed 2009 year high. Meanwhile, the steel price adjustment also was temporarily paragraphs, the overall steel market, the lack of major positive stimulus, coupled with long-term market volatility, rising steel prices trend slowed in the second half and showed consolidation pattern, some species such as thread, paper and even heat adjust the market appears tight. In this context, how will the Steel Market in April to run?
Indeed, after a quick pull up the steel city of the existence of a technical adjustment, while supporting and promoting a positive factor for the current round of price increases to decrease. Currently, both the macro, or micro, a major hot spots, or lack of good news, the market fundamentals such as demand and inventory follow-up attention again to increase. At the same time as in March and a quarter times the data, the approach of the parties on inflation expectations and monetary policy may be increased to adjust the arguments and concerns. Furthermore, the market will benefit cash resources, some varieties of the downstream industry to accept more difficult to price. These factors will limit the steel market operation, the short term will continue to adjust the structure of steel city. But so far, steel prices did not break the upward trend, combined with the cost of support is expected to re-appear Moreover, the market is expected to remain broadly favorable market outlook, exports are also zoom, investors still expected upside.
Compared with the current cost of steel production, the current market price of some varieties is not high, one thread, thermal paper reflected more distinctly. Spot ore imports by Tianjin Port and secondary metallurgical coke price in Shanxi Integrated projections, now two rebar manufacturing costs close to 4,000 yuan totally. Obviously, the rigid support costs, the foundation is expected to show good defensive species, and to increase the market outlook, the formation of support. At the same time, the current market sentiment is not because of price adjustment substantially changed, the overall market outlook is expected for the general to the good.
From the steel mill in terms of ease of the original fuel prices cost pressures are still urgent, and never stopped for the pursuit of profit, prices of some steel mills in May still order up the possibility of rising steel prices and thus become a driving force to stimulate .
From the supply perspective, the demand starts, the main varieties of social decline in stock for 3 weeks, while steel production from the point of view, Breakthrough in February crude steel output level of day (180 tons) less likely, from sense that the overall supply situation in the short term is unlikely to deteriorate again.
On the export side, as the international economic recovery and improved steel market, China's steel external market environment continues to improve, demand increases, it is understood, in March of domestic steel enterprises sharp rebound in export orders, help to mitigate or reduce the domestic supply pressure. Be noted that, even if the export chain, significantly increase over the previous year, but the absolute volume of exports is difficult to reach the level of previous years, the diversion of domestic resources more limited capacity.
