Seasonal Lull Becomes Apparent, Price Decline of High-Priced Construction Steel Accelerates
Jun 26, 2024
Mysteel News: As we enter June, influenced by weak demand and falling raw material prices, the price of construction steel has been on a downward trend, especially since the latter half of the month, the speed of the price drop has noticeably increased. Recently, there have been expectations of interest rate cuts and steel mill production cuts in the market. Do these policies and news provide certain support to the market, and can the price reach a bottom and rebound? Let's analyze the current market situation briefly.
According to Mysteel data, as of June 24, the national average price of rebar is 3632 yuan/ton, a decrease of 258 yuan/ton month-on-month; in Beijing, Tianjin, Shijiazhuang, and other places, the month-on-month price has fallen by 190 yuan/ton, 220 yuan/ton, and 240 yuan/ton respectively, which is lower than the national average. In early June, the national average price fell by about 130 yuan/ton, and the decline in places like Beijing was only 50 yuan/ton, with a significant acceleration in the recent drop.
As of last week, the rate of inventory accumulation in the construction steel market led by Beijing-Tianjin-Hebei has slowed down, with an increase of only 4% compared to the previous week, indicating a clear feature of weak supply and demand in the off-season.
In June, the capacity utilization of rebar in Beijing-Tianjin-Hebei showed a relatively stable trend with a small change. As of last weekend, the capacity utilization of construction steel enterprises in Beijing-Tianjin-Hebei increased by 4% month-on-month, but was 16% lower than the same period last year. Although the current steel mill profit level is low, there is no clear plan for maintenance and production reduction. As the price further declines, the output in the Beijing-Tianjin-Hebei region may decrease, but the extent will not be too large. It is expected that the output will remain at the current level in the short term.
Over the years, the price in the north has always been the lowland of the national price. At the beginning of this year, the price in the north continued to be low. Entering the "Golden March and Silver April" period, the demand in the north was released, and the steel mill production was low, with the market inventory being quickly reduced, supporting the high price. After May, the price has been higher than that in East China and South China. Especially since the middle and late May and June, the South China region has entered the rainy season, with even weaker demand, further expanding the price difference between the north and the south, with some southern materials moving north.
Recently, with the recovery of the local steel mill capacity utilization, the increase in the steel mill's resource allocation, coupled with the arrival of some materials from the surrounding areas, the local resource supply has increased, while demand remains weak. In the trend of falling prices, the willingness to hold prices in the northern market is low, and the price decline in recent days is significantly faster than other regions, with a narrowing of regional price differences.
Overall, there are currently macro-level news of interest rate cuts and reserve requirement ratio reductions, as well as expectations of steel mill production cuts, but the stimulating impact on the market has not yet been reflected. The current impact is more on the supply and demand relationship. Currently, real estate and infrastructure continue to be weak, and it is in an active off-season, making it difficult for demand to improve in the short term. On the supply side, there is no obvious reduction at the moment. Therefore, it is expected that the market will continue to operate weakly in the near future, and the decline in the high-priced areas of the north will be faster, and the price difference between the north and the south will be further narrowed.
Focus on the steel industry, providing real-time industry news, steel mill price adjustment information, market hotspot interpretation, and research reports on the spot trade prices of steel, scrap steel, coke, iron ore, etc., across the country.
Disclaimer: The information provided by Mysteel is for customer decision-making reference only. Any decisions made by customers are unrelated to Mysteel.
For more information, please follow our official account and reply with [Benefits] to get exclusive benefits for fans.
Click 'In Read' to make a big profit in the steel market!!
Americ Energy (CHINA) Co., Ltd. stands as a prominent manufacturer and distributor of a comprehensive range of stainless steel products, designed to cater to the diverse needs of various industries. Their offerings encompass stainless steel tubes, plates, strips, and square tubes, all manufactured to uphold the highest quality benchmarks.
Contact Information:
© 2024 Americ Enegy (China) Co.,Ltd. All Rights Reserved.
IPv6 Network Supported
