Hot Steel Market "Sudden Brake" A Brief Callback Or Inflection Point?

? ? ? ? Before the hot steel market, unexpectedly began to continue to fall, in a short period of time out of the "ice and fire" situation. Futures such as rebar, hot rolled coil, iron ore and other futures showed an obvious downward trend in the past two days, and the rapidly changing futures market also affected the spot market.

Has the turning point of cooling that downstream enterprises have been expecting for a long time? In the short-term cooling process of the steel market, which are the leading factors affecting the steel market, such as high-level shouting, institutional moves, monetary policy changes and the silent change of supply and demand environment?

Steel market hot market emergency brake

After the May Day festival, the steel market continued to boom. Under the expectation of overall demand support and tight supply, domestic steel prices have been constantly exploring at the historical high level, and the continuous soaring has stimulated the nerves of all walks of life.

On May 6, the national development and Reform Commission issued a statement saying that it would suspend all activities under the telephone system of China Australia strategic economy for an indefinite period.

Subsequently, the Ministry of industry and information technology issued the implementation measures for capacity replacement in the iron and steel industry.

In the next few days, the prices of iron ore, rebar and hot-rolled coil have reached the highest level in history. On May 9, the China Iron and Steel Association called for effective containment of the rising trend of iron ore prices, but the market trend remained unchanged.

Starting from May 10, Dachang and Zhengshang exchanges issued documents to warn the risk, and adjusted the margin of steam coal, the quality standard of iron ore delivery and the quality promotion discount. The market was sentimental and temporarily fell back, and then recovered again.

Surprisingly, just a few days later, the hot steel market ushered in an emergency brake.

Previously the hot steel market, began to continue to fall, in a short period of time out of the "ice fire two days" situation. Visual China

In view of the recent sharp rise in iron ore and steel prices, the national development and Reform Commission and the State Administration of market supervision have recently conducted a joint investigation in Hebei Province; At the same time, the executive meeting of the State Council also called for tracking and analyzing the situation at home and abroad and market changes, doing a good job in market regulation, and coping with the excessive rise of commodity prices and its associated effects.

On May 13, the black line varieties led by iron ore fell all over the line, with iron ore falling by more than 7%, opening the prelude of short-term correction in the steel market.

In the morning of May 14, the black series of domestic commodity futures market fell again, continuing the previous day's decline, and the main contracts of rebar and hot-rolled coil both fell to the limit. As of the end of the day, the main contract of rebar futures of Shanghai stock exchange closed at 5641 yuan / ton, down 360 yuan / ton, or 6%; The main contract of hot rolled coil closed at 6135 yuan / ton, down 392 yuan / ton, or 6%; The main iron ore futures contracts of the exchange closed at 1173 yuan / ton, down 95 yuan / ton, or 7.49%.

Driven by the continuous slump in the futures market, the spot market has also seen an obvious price decline.

According to the monitoring data of Lange Steel's cloud business platform, on May 14, the average price of 25mm grade III rebar in key domestic cities was 6067 yuan / ton, which was more than 100 yuan lower than the previous day; Hot rolled coil, medium and heavy plate, hot rolled strip, galvanized pipe and other varieties also showed a significant decline, with a drop of 60-229 yuan / ton.

Steel enterprise enthusiasm high, downstream market waiting to cool down

From the recent market point of view, the market price has obviously deviated from the supply and demand fundamentals, and the will of the regulatory level to stabilize or even restrain the excessive rise of iron ore and steel prices is very obvious. In order to stabilize the price order of steel market, on May 14, many relevant departments of Tangshan and Shanghai interviewed local steel production enterprises, emphasizing on strengthening price management and maintaining the price order of steel market.

Although the price of iron ore and other raw materials has increased significantly recently, with the soaring steel price, the profit per ton steel of domestic steel enterprises has easily exceeded 1000 yuan, which is at the highest level in history. Although domestic steel demand fell in the first quarter, foreign demand also gradually recovered. After the adjustment of steel export tax rate, domestic steel enterprises still have a large profit margin, which also continues to stimulate the production enthusiasm of enterprises.

According to the data released by the China Iron and Steel Industry Association, in the first ten days of May this year, the association's key statistics showed that steel enterprises produced 24.1779 million tons of crude steel, with a month on month increase of 0.75% and a year-on-year increase of 17.84%; The output of pig iron and steel was 20.6137 million tons and 22.922 million tons, respectively, with a year-on-year increase of 11.50% and 19.81%.

However, the sharp rise in steel prices has brought huge financial pressure and risk to downstream enterprises. Some steel traders even have several price suspension and only accept cash shipment.

For the home appliance industry with large steel consumption, the soaring cost directly leads to the failure of some enterprises to make profits in the early stage of orders, so they can only choose to stop receiving orders, refund orders or even break contracts to minimize losses; This phenomenon, in the downstream of steel machinery, elevator and other industries, steel prices also lead to the company's high procurement costs, most enterprises have not affected the production of materials under the circumstances, as far as possible to reduce steel procurement, a strong wait-and-see willingness.

Jiang Yuanlin, a building materials analyst with Centennial construction network, told reporters in the 21st century economic report that the continuous rise in steel prices has affected the construction progress of many construction units. They choose to delay the construction progress of some projects or stop work to reasonably control the cost.

According to a survey conducted by centennial.com, half of the enterprises surveyed pointed out that the rise in steel prices has affected the construction progress. About 30% of the construction sites have suspended the purchase of steel and are ready to make new procurement plans according to the subsequent trend of steel prices.

A brief correction or an inflection point?

At present, commodity futures prices are still at a historical high, and a short-term correction is also expected. But does this mean that the turning point of industry cooling has appeared?

Wang Guoqing, director of Lange Iron and Steel Research Center, said in an interview with 21st century economic reporter that the decline of futures prices in this round is also related to the increase of inflation pressure in the United States, changes in monetary policy expectations and calls from regulators to stabilize prices.

Money liquidity is also one of the important factors affecting steel prices, and the market is also very concerned about the changes in financial data. The growth rate of broad money and narrow money balance in April was significantly lower than that of last month, and the new social financing in April of the same period did not meet the previous market expectations.

This round of steel prices rose too fast, leading to a substantial increase in the cost of key projects, and had a certain impact on downstream procurement demand, which was reflected in the recent changes in the shipment volume and the social inventory of steel.

Lange Iron and Steel Statistics show that the recent Beijing building materials market has seen a significant decline in the shipment of 10 large enterprises, Tangshan section steel plant also significantly reduced the shipment; At the same time, the decline rate of social inventory of plates in 29 key cities has also been significantly reduced.

Wang Guoqing said that due to the continuous expansion of profits, steel mills' production enthusiasm is still high. With the gradual arrival of the rainy season in the south, the inventory decline will slow down, and the domestic steel market will face greater pressure of callback in the short term.

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