Details of today's steel mill price adjustment
Today, many steel mills raised the purchase price of scrap steel. For example, the purchase price of Anshan Baode scrap steel was increased by 30 yuan, Jiangxi Jiugang bulk scrap steel, steel bar briquette and other categories were increased by 30 yuan, and Qinghai Xining Special Steel was also increased by 30 yuan. At the same time, Henan Minyuan Steel, Hebei Yongyang Special Steel Group New Area, etc. have also raised prices to varying degrees. These price adjustments are not accidental, but are affected by a combination of multiple factors.
From the supply of scrap steel resources, the recent supply has been relatively tight. With the continuous advancement of environmental protection policies, some small scrap steel recycling companies are facing higher environmental protection requirements and cost pressures, resulting in a decrease in scrap steel recycling. Scrap steel transportation in some areas is also affected by factors such as traffic control, and logistics costs have increased, further restricting the supply of scrap steel.
In terms of demand, steel mills still have strong production demand. Although the steel industry is currently facing certain market pressure, with the gradual advancement of infrastructure construction projects, the demand for steel is still being released. In order to maintain a normal production rhythm, some steel mills have to raise the purchase price of scrap steel to attract more sources of goods.
Multi-dimensional factors affecting steel prices
Migri-policy factors
Migri-policy factors
Migri-policy has a vital impact on the steel industry. Economic and trade relations eased after the call between China and the United States, and Trump extended tariff exemptions on Chinese goods until August 31, which improved market sentiment to some extent. However, domestic favorable policies are currently relatively limited, and the motivation to drive a sharp rise in steel prices is still insufficient. The introduction and implementation of subsequent policies will become one of the key factors affecting the trend of steel prices.
Supply terminal status
Although iron and water production decreased last week, it was still at a high level, reaching 2.418 million tons, a decrease of 1,100 tons from last week. The output of the five major materials also declined, to 8.8038 million tons, down 47,000 tons from last week. Although the output has been adjusted, the high production of molten iron has a certain suppression on the rise in steel prices. At present, the current steel production capacity is still relatively abundant. If the output further increases in the later period, it will put greater pressure on steel prices.
Demand side performance
From the demand side, the total inventory of the five major materials fell by 17,900 tons to 13,638,100 tons, and the apparent demand fell by 316,200 tons to 8,821,700 tons. The decline in inventory has narrowed significantly and the table of prices needs to decline, which puts great pressure on steel prices. With the arrival of high temperature and rainy summer weather, industries such as construction have been affected to a certain extent. Steel demand has entered the traditional off-season, and the market's expectations of weakening demand have gradually increased.
Forecast of steel price trend this week
Combining the above factors, it is expected that steel prices will show a weaker operating trend this week, with an amplitude of between 10 - 30 yuan/ton. From the perspective of demand, this week, a new round of rainfall in the south will begin, and extreme weather will continue to affect demand. During the national high school entrance examination, cities require "silent" construction, and the terminal table needs to decline further. The United States doubled the import tariffs on steel and aluminum to 50%, and domestic demand and export expectations were under pressure. Some steel companies increased production line maintenance, and iron and water production has slowly declined for four consecutive weeks, and the supply of threads will continue to decrease. Coke was suppressed by steel companies again, the cost-end support was not strong, the inventory reduction of steel bars slowed down and approached the turning point, the inventory of hot coils stopped falling and accumulated slightly, and the market operation was still cautious.
The above information is for reference only! What do you think about the future trend of steel prices? Welcome to leave a message in the comment area to discuss!
