I. Steel futures market prices
On May 17, the domestic steel market was up and down, with Tangshan Qian’an PuFang billet tax up 20 to 3,460 yuan / ton. On the transaction side, the futures snail rose, only demand and speculate in the market actively, the market turnover improved significantly.
On the 17th, the futures rose, closing at 3715, up 1.45%, with DIF and DEA overlapping, and the RSI trilinear indicator at 43-59, between the middle and lower Bollinger bands.
On 17 May, three companies cut the ex-factory price of construction steel by 20-50 yuan/tonne and three companies raised the ex-factory price of construction steel by 20-50 yuan/tonne.
II. Four main types of steel market prices
Construction steel: On 17 May, the average price of 20mm grade 3 seismic rebar in 31 major cities nationwide was RMB3,825/tonne, up RMB3/tonne from the previous trading day. In the short term, with the resumption of blast furnace production in some areas, rebar production is expected to pick up this week, the recent heavy rain areas in the south have moved south, rainy weather has a greater impact on demand, the overall supply and demand fundamentals have not eased. At the same time, the eighth round of coke reduction opened, the cost side of the support is still weak, the fundamental performance is not good, is expected to 18 domestic structural steel prices or will continue to be the main shock running.
Hot Rolled Coil: On the 17th of May, the average price of 4.75mm hot rolled coil in 24 major cities across the country was RMB 3,895 / tonne, down RMB 10 / tonne from the previous trading day. The futures shock upward, boosting market confidence, some market prices upward, speculative demand is still available, turnover has improved. Overall view, although the market is recovering, but the fear of high mood is still present, the high price of commodities will not remain high, coupled with the inventory is at high levels, is expected to 18 hot rolled coil prices or will shock stable operation.
Cold rolled coil: May 17, the national average price of 1.0mm cold coil in 24 major cities 4508 yuan / ton, up 2 yuan / ton compared with the previous trading day. Some market spot prices increased slightly, but most traders said that the current downstream demand is still weak, and the downstream of self-ordering is poor, the overall market trading atmosphere is inactive, short-term spot prices difficult to get out of the inversion of the market, traders cautious pessimism attitude to the market. On the whole, it is expected that the price of domestic cold rolled coil will be weak and stable on the 18th of the month.
Medium-thick plate: May 17, the average price of 20mm general plate in 24 major cities across the country 4216 yuan / ton, down 3 yuan / ton compared with the previous trading day. Macro expectations are insufficient, coupled with the continued decline in steel prices earlier, resulting in a more cautious upstream and downstream mentality, downstream just need to purchase, traders sentiment to neutral short. And the supply-side recovery is stronger than the demand-side, resulting in a slightly weaker market trend, price support is insufficient. However, with the price of raw materials lift, billet cost-side profits have recovered slightly, there may be room for a rebound in the finished product. Comprehensive view, steel prices in the continuous grinding bottom, boosted by the futures, is expected to 18 national thick plate prices may have a narrow upward movement.
III. Raw fuel market prices
Imported ore: On May 17, the mainstream market price of imported iron ore at Shandong port was shaking and running strongly. PB powder at Rizhao port was quoted at 788, 792, 795, 799 and 800 yuan/ton.
Coke: Coke market prices were weak and stable on the 17th. On the raw material side, as some coal prices have bottomed out and stabilised, the online bidding for coking coal has risen and fallen this week, with each type of coal recovering slightly and the market sentiment improving slightly. On the coke company side, the profitability of coke companies is still good and the start-up is stable, traders are making inquiries, coke company shipments are improving, the coke inventory in the factory has been greatly reduced, which is better than before, but some of the excess resources are being replenished, and individual coke companies are experiencing the phenomenon of distress sales. Downstream, there has been an improvement in the profitability of steel mills and a slowdown in the decline of iron production, and in conjunction with the entry of intermediate trade links, coke demand has been on the rise.
Steel scrap: On May 17, the average price of steel scrap in 45 major markets across the country stood at 2,417 yuan/ton, up 4 yuan/ton from the previous trading day. Specifically, in the steel mills, the scrap price remains low because of the end product’s performance, production remains sluggish, steel enterprises in prudent attitude, cost reduction and efficiency remain the main priorities, the scrap price at present slightly lower than iron ore, no cost benefit, so the short-term steel enterprises holding scrap remains weak. As for scrap, the current decline in scrap slightly less than iron ore, no cost-effective advantage, so the short-term steel enterprises with waste will remain weak.
IV. Steel market price forecast
According to Mysteel survey 237 dealers, May 15-16 building materials sales 186,000 tons and 139,000 tons respectively. Currently, the steel market volume has been highly volatile, downstream purchases are driven by speculative demand, which also reflects the market’s entangled longs and shorts.
On the one hand, with the recent substantial cost reductions, steelmakers’ losses have narrowed considerably, production cutbacks are ongoing, fuel prices are gaining ground, and supply/demand imbalances are easing. On the other hand, the real estate market recovery has slowed down, high temperature and rainy weather, such as the impact of the demand performance is not hard enough. All in all, market uncertainties mean that short-term steel prices are often volatile.
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