Steel Market Prices Continue to Be Weak

Summary of Spot and Futures Steel Prices

On June 24th, the domestic steel market prices fell weakly, with Tangshan Qian'an's general square billet resources falling by 10 Yuan to 3,290 Yuan/tonne including tax upon ex-factory. The morning futures continued to decline, and the domestic spot prices loosened across the board in the morning. In terms of transactions, the overall market performance was weak in the morning, and as the futures continued to fall in the afternoon, the decline in spot prices in most cities expanded, with the whole day's transactions being sluggish.

Steel Prices on June 24th

On June 24th, the main rebar futures were weak, closing at 3,532, down by 1.51%. The DIF and DEA continued to move downward, and the RSI indicators were between 16-39, running close to the lower Bollinger Band.

Daily Price Quotes for Steel Products

Reinforcing Bar: On June 24th, the average price of 20mm Grade 3 earthquake-resistant reinforcing bar in 31 major cities across the country was 3,632 Yuan/tonne, down by 41 Yuan/tonne from the previous trading day. In the short term, there are no obvious factors driving the improvement of current downstream demand, and the high temperature and rainy weather have led to a significant seasonal decline in demand, with the fundamental contradiction of the rebar market accumulating. It is expected that the domestic construction steel prices will continue to be weak and fluctuate on the 25th.

Hot Rolled Coil: On June 24th, the average price of 4.75mm hot-rolled coil in 24 major cities across the country was 3,735 Yuan/tonne, down by 29 Yuan/tonne from the previous trading day. The weak terminal demand is still the main factor suppressing the steel price, coupled with the continuous heavy drop in the domestic stock market, the overall market atmosphere is weak. Macroscopically, the LPR has remained unchanged for four consecutive months, and the real estate market recovery is still relatively slow, coupled with frequent extreme weather, high temperatures in the north and floods in the south, demand has declined to some extent. The current production reduction has a limited impact on finished products, the macro support is not strong, and the actual situation of finished products is weak. It is expected that the price of hot-rolled coil will be weak on the 25th.

Cold Rolled Coil: On June 24th, the average price of 1.0mm cold coil in 24 major cities across the country was 4,237 Yuan/tonne, down by 19 Yuan/tonne from the previous trading day. On the 24th, the weak operation of the hot coil futures led to a decline in spot prices, the market trading atmosphere was relatively cold, some traders accelerated the shipment with a slight discount, and the overall transaction performance was average during the day. The current market demand is still low, terminal customers are less active in ordering, transactions are mainly concentrated in low-priced resources, and it is difficult to sell high-priced resources. In terms of mentality, due to insufficient market demand support, most merchants hold a cautious and wait-and-see attitude towards the future market trend in the short term. According to feedback from traders in the East China region, in order to avoid risks and reduce capital and inventory pressure, operations are mainly focused on selling at a discount to recover funds. Overall, it is expected that the cold rolling price will fluctuate narrowly on the 25th.

Medium Plate: On June 24th, the average price of 20mm general plate in 24 major cities across the country was 3,788 Yuan/tonne, down by 26 Yuan/tonne from the previous trading day. According to market feedback, transactions were light on the 24th, downstream customers were not in a hurry to purchase, and there was a phenomenon of regret orders after the prices were lowered again in most cities in the afternoon, and traders with large inventories were anxious. Currently, the cost support has weakened, the steel mill profits are average, but the current production enthusiasm has not significantly decreased, the overall output of the medium plate factory has not decreased but increased, and the mobility of resources between the north and the south has weakened. At this stage, traders are cautious in their operations, mainly focusing on fast in and out to reduce inventory, and some are selling at a discount to facilitate transactions. Overall, it is expected that the domestic medium plate price will fall slightly on the 25th.

Daily Price Quotes for Raw Materials

Iron Ore: On June 24th, the prices of mainstream imported iron ore varieties at Shandong ports were weak, with a cumulative decline of 10-12. In terms of selling, the enthusiasm of traders in the region to offer prices was average, mainly shipping at suitable prices, and so far there has been little transaction in the spot market; in terms of buying, steel mills in the region have mostly maintained low inventory operations, with fewer inquiries. Currently, the main PB powder is between 795-798; the main super special powder is between 630-635; the main PB block is between 990-995 (unit: Yuan/wet ton).

Scrap Steel: On June 24th, the average price of scrap steel in 45 major markets across the country was 2,395 Yuan/tonne, down by 13 Yuan/tonne from the previous trading day. Specifically, on the 24th, the purchase prices of scrap steel at many steel mills and markets across the country fell slightly, with the decline focused between 20-40 Yuan/tonne. This is mainly due to the continuous greening of black metal prices, the market confidence was hit, and transactions were weak. Under the condition of shrinking demand, steel mills have weakened their enthusiasm for production, the demand for scrap is not good, and they have turned to reduce the purchase price of scrap steel. In terms of the market, recently, due to the impact of high temperature and heavy rainfall, the phenomenon of low scrap steel raw material collection volume in various parts of the country is quite common, the output of construction and industrial scrap steel has decreased, the base collection price has fallen relatively little, but at present, due to the poor demand for scrap steel by steel mills, after the cost-effectiveness advantage of scrap steel has narrowed, the price of scrap steel is likely to continue to fall slightly. It is expected that the national scrap steel market price will mainly operate with a narrow adjustment on the 25th.

Coke: On June 24th, the coke market price was temporarily stable. Since last week, the mainstream coke enterprises proposed the first round of coke price increases, and the downstream steel mills have not responded so far. It is understood that some steel mills have a strong resistance, and the game between steel and coke has intensified. In terms of supply, the coke enterprises are maintaining a normal work rhythm, shipping is quite active, most of the plant coke inventories are almost non-existent, and the current coke enterprises are mostly on the edge of the profit and loss line or slightly loss-making; on the downstream side, the steel billet price has now reached a relatively low position, and the construction steel