The hottest steel price is now returning, and the

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With the release of demand and trading volume, the core factor of short-term pressure on steel prices, "tight funds" has been effectively alleviated. At this stage, the 05 contract of steel futures begins to operate the logic of basis repair. The return of demand has led to the repair of the supply-demand relationship, making the short-term spot price center in April more clear. Taking East China represented by Shanghai and Hangzhou as an example, the spot price center of screw thread may be around 3650 yuan/ton to 3750 yuan/ton, and the spot price center of hot coil may be around 3800 yuan/ton to 3900 yuan/ton

however, at present, the compressive strength of Jinan assaying carton in the steel period is class 1. According to the main contracts of corrugated cardboard base paper goods have been changed to 10 contracts, the current supply-demand relationship may be difficult to establish after the second quarter, especially when the real estate and infrastructure investment are basically determined to shrink, it is inferred from the supply-demand situation in 2017 (described in detail later), as well as the recently estimated supply cost of electric arc furnace, The spot center corresponding to rebar 10 contract is expected to be between 3300 yuan/ton and 3500 yuan/ton, while the relatively high-end plate may still be greatly affected by supply side reform and trade friction in 18 years. The forward price center will not make judgment for the time being, but the spiral difference should be maintained at the level of 150 yuan/ton to 200 yuan/ton or even higher

how to view the price system

the previous article proposed two sets of price centers, the short-term steel price center corresponding to the 05 contract and the long-term steel price center corresponding to the 10 contract, which we will analyze respectively

let's first talk about the short-term price center. Steel futures fell by more than 700 points at most, while spot futures fell by 300 to 400 yuan per ton when they were higher, and futures fell by 3 points more than spot. However, the quality and accuracy of futures were relatively inferior to imported electromechanical products. More than 00 points were caused by the panic that the United States initiated trade frictions, which led to the financial market's fear of strengthening motor vehicle pollution control at the same time (there was also the element of fulfilling some macro expectations in advance), The spot price stabilized when it fell by about 400 points at most, because there was a solid fundamental support below. Take East China represented by Shanghai and Hangzhou as an example. The price of rebar corresponding to this fundamental support is around 3600 yuan/ton

then, with the increase of shipments and the decline of social inventory (the decline rate of social inventory returned to a record high last week), the financial pressure of traders eased, and traders followed the rhythm of steel mills to rationally "support prices"

but in the long run, the steel price is slowly sinking towards a huge ship, and the relief of capital pressure driven by the release of demand is like a big hand pulling the huge ship back from time to time. However, under the general trend of downward macro expectation, the power of the big hand of demand is afraid to be weaker and weaker

moreover, no matter from the perspective of unswerving national policies such as financial deleveraging, supply side reform and industrial transformation and upgrading, the capital side of traditional upstream black goods cannot be fundamentally improved in the near future. Therefore, maintain the view of supply and demand repair, short-term capital relief, and steel price shock rebound

next, let's talk about the long-term price center and supply and demand

this round of sharp price decline gives us a good opportunity to observe the short-term supply margin of electric arc furnace. According to the data of an e-commerce platform, the scrap price has reached around 1900 yuan/ton from the highest 2400 yuan/ton after the Spring Festival, and the current price is about 1950 yuan/ton. If we take 1950 yuan/ton as the phased price support of scrap, plus the steelmaking cost of electric arc furnace of about 1200 yuan/ton, the supply cost of short-term electric arc furnace should be around 3150 yuan/ton. In other words, when the steel price reaches 3200 yuan/ton, it will affect the supply of electric arc furnace that uses microwave radiation to reduce potassium permanganate to manganese dioxide, thus affecting the overall supply and demand of steel

of course, I also learned from the exchange with relevant experts that the decline of steel price may have a negative feedback effect on the scrap price, that is, the lower the steel price, the cheaper the scrap price is, but from the market test of this period of time, there is still some support for the short-term scrap price. Moreover, according to a senior person in the iron and steel industry, the current long process steelmaking of large state-owned steel plants, if the hidden costs of system, debt, environmental protection and so on are included, may also be close to 3000 yuan/ton to 3300 yuan/ton

in addition, from the perspective of supply-demand relationship, although the logic of demand reduction caused by the decline in investment is established, the process of demand reduction will be slow, and the tension of capital will further prolong the release time of stock demand, and the demand from the end of the second quarter to the beginning of the third quarter should still be guaranteed

at the same time, the overweight of environmental protection also disturbed the supply. The unexpected supply in the previous stage mainly came from the unexpected addition of scrap. However, with the recent decline of steel prices and the pessimism of long-term steel prices, the impact of the reduction of scrap addition on the supply will gradually appear. Therefore, in the medium and short term, the low central price of 3300 yuan/ton in the early stage of thread 10 contract should be difficult to effectively fall below, unless there is another "trade war" and other black swan events

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