The hottest steel price was hit vertically, and th

Steel prices have been hit vertically, and traders' lives are hanging on the line.

for a long time, there has been a saying of "gold, silver and four" in the steel market in March and April. However, this year, the steel traders are welcomed by the continuous decline of steel prices after the Spring Festival. With the approach of April, the high inventory superimposed on the increased capital pressure, traders' sentiment turned pessimistic, and their willingness to support prices weakened, resulting in a sharp decline in spot goods. At the same time, the Sino US trade war has increased the pessimistic expectations of the market. While the spot price of steel fell, the trend of steel stocks in the A-share market is also difficult to be optimistic. Recently, the six-day maximum decline of several steel stocks, such as Xingang, Liugang, Shaogang Songshan and Xining Special Steel, has exceeded 20%

indirect steel exports under pressure

with the U.S. government and China in a confrontation, various discordant voices around the trade war are heard. Just when people think that the Sino US trade war is likely to ease, accuridecorporation and maxion wheelsakron LLC of the United States recently applied to the U.S. Department of Commerce and the U.S. International Trade Commission for anti-dumping and countervailing investigations against steel wheel hub products originating in China. According to us statistics, China's exports of products involved in the case to the United States in 2017 were about $420million

on March 27, the head of CISA delivered a speech on the EU's launch of steel safeguard measures. On March 26, the EU announced that it would launch a safeguard investigation on imported steel products, which is a practice of the United States to complicate the problem after provoking the incident. This decision of the EU will aggravate the instability and instability of the international steel market

we hope that the EU will carefully assess the impact of the US tax measures on imported steel and prudently take safeguard measures. We call on the Chinese government to take corresponding measures when necessary to strictly prevent the increase of imported steel products from impacting the Chinese market, resolutely maintain the stability of the Chinese market, and safeguard the interests and rights of Chinese steel enterprises

"due to the small proportion of steel directly exported by China to the United States, the direct impact of tariffs is relatively limited. However, the market generally believes that steel exported by China to ASEAN, South Korea and other regions is exported to the United States after re export trade and processing, so the indirect impact is relatively large." Jing Chuan, deputy general manager of CUHK futures, said in an interview with China times

Jingchuan pointed out that the United States imported 35.93 million tons of steel in 2017, with the top 20 steel source countries accounting for 91%, and these countries are also the main destinations for China's steel exports. For example, in 2017, the United States imported 3.65 million tons of steel from South Korea, while China exported 11.4 million tons of steel to South Korea, accounting for 15% of China's exports that year

in addition, due to the high coincidence between China's major steel exporting countries and the United States' major steel importing countries, the United States plus 1 can measure the tension, pressure, stiffness, displacement, date and number of the spring; Imposing import tariffs is bad for the indirect export of steel. In addition, Jingchuan said that many of China's exports to the United States, such as mechanical and electronic equipment, are downstream products of steel, which is within the scope of key taxation this time. If the export is blocked in the future, it will inevitably have an adverse impact on domestic steel consumption, which will also put pressure on steel prices to a certain extent

inventory peaking demand continues

in the past, March was the "peak season" for steel construction resumption, and steel prices generally rose steadily. However, this spring's domestic steel market is "not prosperous in the peak season". Since March, steel prices have continued to fall. At present, the overall social inventory of steel has also reached a historical high, and steel traders have suffered large losses. What is the reason

it is understood that since the beginning of March, the main 1805 contract of rebar futures has been rising first and then declining. As of March 28, it closed at 3431 yuan/ton, with a cumulative decline of 14.56%. With the trend of rebar futures, the spot price of rebar decreased synchronously. According to the monitoring data, as of March 27, the price of deformed steel bars in Shanghai rose to 3560 yuan/ton, down 580 yuan/ton or 14.01% from 4140 yuan/ton on March 1

"Such a large decline obviously fell into the cost line of winter storage of businesses before the holiday. Most of the goods sold in trade were determined by the downstream demand. Although the black price rebounded from time to time, after the deep drop of rebar spot in the past two days, most downstream buyers were on the sidelines, or on demand, they could make buildings and bridges bear a greater load to purchase. From a fundamental point of view, the current market expectations, as a whole, maintained a pessimistic judgment about the future." Du Hongfeng, a senior analyst, said in an interview

in addition, due to the sharp drop in the price of rebar, steel traders who accelerated their stocking before the year undoubtedly walked on thin ice. According to the research report released by Everbright Securities, 30% of the inventory of steel traders is' financing ', and the time node is from March 25 to 31, and the end of the month is also the end of the quarter, which is the peak of repayment

in the warehouse of a steel trader in Jinan, Shandong Province, the warehouse is almost full of all kinds of construction steel. The trader Zhang Zhaolin said that in January and February this year, he stored a total of 30000 tons of steel, although he has successively sold some of it. But the inventory is still more than 10000 tons, much higher than in previous years. The reason for increasing winter storage inventory is that we were optimistic about the market this year. However, after the Spring Festival, the market situation was not as good as expected

after the Spring Festival, steel prices have continued to fall. Take rebar for example. At the beginning of March, the price per ton was still about 3900 yuan, and now it has fallen to 3700 yuan. In January and February, when steel traders stored steel, the average price was about 3800 yuan per ton, and now it has fallen below the cost price. If you ship at the current price, you will lose money if you give a ton. Some steel traders will directly close the warehouse and not sell it. However, if the price continues to fall, it is estimated that they will not be able to bear it

according to the data of China Steel Association, in March 2018, the total social inventory of five categories of steel in 20 cities across the country continued to rise month on month, and the growth rate was expanded compared with the past, among which the growth rate of long timber inventory was still large. The total inventory of this month was 15.43 million tons, an increase of 3.92 million tons, an increase of 34.1%. Among them, the total inventory of steel market was 14.37 million tons, with a month on month increase of 4.09 million tons, up 39.8%

the port inventory was 1.06 million tons, a month on month decrease of 170000 tons, a decrease of 13.5%. In terms of varieties, the inventory of rebar this month was 7.26 million tons, an increase of 2.32 million tons over the previous month, an increase of 46.9%

among them, the steel market inventory was 7.04 million tons, an increase of 2.429 million tons over the previous month, and the port inventory was 230000 tons, a decrease of 112000 tons over the previous month. The inventory of hot rolled coil this month was 2.08 million tons, an increase of 278000 tons or 15.4% over the previous month. Among them, the steel market inventory was 1.86 million tons, an increase of 241000 tons over the previous month, and the port inventory was 220000 tons, an increase of 37000 tons over the previous month

"at present, due to the accumulation of inventory and the delay of downstream demand in the steel market, steel prices continue to fall, pushing steel traders to the edge of cutting positions, while some small traders began to sell at a lower price due to the pressure of capital withdrawal, further exacerbating the price decline, and the stampede of steel traders exacerbated the rate of price decline." Sun Peng, general manager of Shanghai Luming industry and Trade Co., Ltd., said in an interview

the continuous decline in the spot price of rebar is closely related to the lower than expected release of downstream demand after the Spring Festival. The social inventory of steel is high, significantly higher than that in the same period last year, but the downstream construction is later than that in previous years, and there is a mismatch between supply and demand. In this regard, Du Hongfeng said that under the condition of weak fundamentals of rebar itself, the rising trade friction between China and the United States has exacerbated the pessimism of the market

on March 23, black series futures fell sharply, rebar futures fell by the limit, commodity funds fled by 4.9 billion, and market risk appetite declined. From the recent position changes of rebar, the price of rebar fell sharply in the weeks of March 9, March 16 and March 23, and the position continued to increase, respectively 3.55 million hands, 3.77 million hands and 3.89 million hands, with an increase of 537000 hands, 221000 hands and 120000 hands respectively, indicating that there are short funds shorting with the help of the market atmosphere

a-share steel sector is difficult to be optimistic

while the steel price has fallen, the trend of steel stocks in the A-share market is also difficult to be optimistic. In particular, after the outbreak of trade disputes between China and the United States, on March 23, the number of down limit stocks in the sector reached 10. The target stocks that were famous in the 2017 cycle, such as Shaogang Songshan, Bayi Iron and steel, Valin Iron and steel, collectively settled at the down limit on the same day. Statistics show that from March 22 to 28, except for Wujin stainless, which rose slightly by 0.06 in total, all other normally traded component stocks fell. In addition, 16 stocks fell by more than 10%, while Liugang and Xingang both fell by nearly 20%

it is worth noting that in its latest research report, Tianfeng Securities believes that due to the Sino US trade war and the impact of middlemen's price reduction and shipment at the end of the month in order to recover funds, although the steel price has fallen significantly recently, when the short-term negative sentiment is digested, the resumption of work will bring about the tightening trend of supply and demand unchanged

Fangda special steel predicted in its 2017 annual report that China's steel industry is still in the period of transformation and upgrading in 2018, and the domestic steel supply and demand fundamentals will gradually transition from tight balance to loose. The situation of strong steel and weak raw materials in 2017 may be difficult to continue in 2018, and the profits of steel enterprises will appear high and narrow. On the whole, steel prices are expected to show a wide range of fluctuations in 2018

"The appreciation of RMB and the increase of tariffs in export places are bad for steel in the short term, but we should also see that this is only one of the factors affecting steel. First of all, exports account for about 10% of domestic steel. Now we expand it to a larger scale market that is expected to be used in the market, and the proportion is not high. Second, although the export difficulty has increased due to the above factors, this phenomenon is not the first time. In fact, it has occurred many times in the past few years , exporters have some experience in dealing with it. " Jingchuan said in an interview

in addition, steel exports are also closely related to the economic development of the export place. At present, the major economies in the world are in good economic operation, and the improvement of economic growth can drive the demand for local steel, which is conducive to domestic exports. Therefore, this does not mean that domestic steel exports will slow down and cause thread prices to continue to fall

in addition, Du Hongfeng said that the current industrial products market is still in a situation of strong supply and weak demand. It is expected that the market may rebound in the short term after the sharp fall, but the downward trend of prices can be basically determined, and the "bull market" since 2015 may be coming to an end