6 Steel Mills Cut Prices, Spot Steel Prices Fall Below 3500, Steel Prices Continue to Weaken
Jul 12, 2024
On July 10th, the domestic steel market fell. The Tangshan Qian'an general square billet ex-factory price including tax dropped by 20 to 3260 yuan/ton. In terms of transactions, the decline in futures prices has intensified the pessimistic sentiment in the market, slowing down the pace of terminal purchases, frequent low-priced resources, and the overall market transaction continued to decline.
On July 10th, the main contract of rebar futures closed at 3478, a decrease of 0.91% from the previous trading day. The DIF and DEA overlapped, and the RSI indicator lines were between 28-40, operating between the middle and lower tracks of the Bollinger Bands.
On July 10th, 6 steel mills reduced the ex-factory price of construction steel by 20-30 yuan/ton.
On July 10th, the national average price for 20mm Grade 3 earthquake-resistant rebar in 31 major cities was 3590 yuan/ton, a decrease of 19 yuan/ton from the previous trading day. In the short term, the current supply-demand contradiction cannot be fundamentally improved, and it is expected that the construction steel price will maintain a weak operation trend on the 11th.
On July 10th, the national average price for 4.75mm hot-rolled coil in 24 major cities was 3690 yuan/ton, a decrease of 14 yuan/ton from the previous trading day. Currently, the market is in a traditional off-season, and downstream rigid demand is difficult to significantly improve. On the supply side, most steel mills are at a break-even point, with no expectation of significant production cuts at present, and pig iron is at a relatively high level, with limited expectations for raw material purchases, and cost support is relatively weak. Overall, supply is strong and demand is weak, and it is expected that the price of hot-rolled coil will tend to be weak on the 11th.
On July 10th, the national average price for 1.0mm cold coil in 24 major cities was 4154 yuan/ton, a decrease of 13 yuan/ton from the previous trading day. The current off-season sales pressure on cold-rolled coil is gradually increasing, and with no significant reduction in supply, the inventory reduction speed is slow, and merchants can only choose to fall in price first to ensure transactions. In terms of mentality, the current spot market demand is flat, and merchants are cautious and slightly pessimistic about the future market. It is expected that the national cold-rolled coil spot price will be weak and stable on the 11th.
On July 10th, the national average price for 20mm general plate in 24 major cities was 3727 yuan/ton, a decrease of 13 yuan/ton from the previous trading day. The market fluctuated downward throughout the day, the market mentality weakened, coupled with insufficient downstream purchasing strength, and the transaction performance of the whole day's plate was poor, with some market quotations slightly falling. In terms of resources, as prices adjust, the current North-South price difference has been somewhat repaired, but considering the poor market delivery, traders are not willing to stock up actively, and the amount of locked orders for North-South materials in the short term is relatively small. Overall, considering the poor demand performance, it is expected that the national plate price will continue to be weak and adjusted on the 11th.
On July 10th, the prices of mainstream imported iron ore varieties at Shandong ports were weak and fell by 15-20 compared to the previous working day. On the seller's side, the enthusiasm of traders in the region to quote was average, mainly suitable for shipping, and there was little transaction in the spot market so far; the inquiry and offer sentiment in the Shandong distant month market was still acceptable, with a small amount of PB powder transactions at the end of August; on the buyer's side, some steel mills in the region replenished the warehouse as needed and maintained low inventory operations, with few inquiries. Currently, the mainstream of PB powder is between 808-813; the mainstream of super special powder is between 640-645; the mainstream of card powder is between 970-975 (unit: yuan/wet ton).
On July 10th, the average price of scrap steel in 45 major markets was 2393 yuan/ton, a decrease of 6 yuan/ton from the previous trading day. Most of the steel mill's scrap purchase prices were adjusted downward, with an amplitude of 10-50 yuan/ton, while the base purchase price adjustment range was smaller. At present, the off-season characteristics are highlighted, the terminal demand for finished products is not good, and most areas are hot and rainy, restricting the pace of scrap steel transportation. The market has continued to decline, so the psychology of market merchants selling down and not selling up appears, and recently the arrival of scrap steel at steel mills and yards has improved. However, the difference between the waste board and the waste board continues to narrow, the steel mill is under pressure to increase production difficulty, and the scrap steel lacks cost-effectiveness compared to iron water. Therefore, overall, it is expected that the scrap steel market will continue to narrow down on the 11th, with an amplitude of 30-50 yuan/ton.
On July 10th, the coke market price was temporarily stable. At present, the coke enterprises are mostly at a high level, some coke enterprises have approached full production, transportation and shipment are smooth, and the factory coke is running at a low inventory. On the raw material side, the price of coking coal fluctuates, and the procurement pace of coke enterprises is average, the market is still quite watchful, and the coke enterprises are cautious in procurement, maintaining low raw material inventory operations; downstream steel mill steel prices are weak, the transaction situation of finished products is not good, and the iron water output continues to rebound. The short-term coke market price is expected to be temporarily stable.
The weak trend of steel demand in the off-season is difficult to change, maintaining a weak supply and demand situation. Recently, the port inventory and port arrival volume of iron ore have continued to operate at high levels, especially the inventory of 45 ports is close to 150 million tons, and the supply and demand contradiction of iron ore has intensified, and the ore price has fallen from a high position. Due to the weak steel market fundamentals, the short-term steel price may continue to fluctuate and be weak.
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