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Steel market’s supply-demand tension eases

March to May every year has been considered the traditional peak season of the steel market in the first half of the year. However, in March this year, although major steel companies raised their ex-factory prices, demand in the steel market failed to increase as expected. Traders have been looking forward to it. The spring market has not yet appeared. In the blink of an eye, in April, traders expected the steel market to usher in a veritable “Silver Four”.

Steel market volume improved significantly at the end of March

After a month of continuous decline, the end of March, the steel market ushered in a long-awaited price increase, coupled with a rise in transaction volume and a decline in inventory, allowing traders to see the hope of a rebound in the steel market. In the constant expectation of traders, the sluggish steel demand since the Spring Festival has finally started to take off.” Demand in the steel market has improved. These days the turnover is obviously good.” Bai Jinglong, deputy manager of the marketing department of Beijing Chaoyin Shunde Trading Co., Ltd, said that after the two sessions, with the large-scale construction of outdoor construction projects, the market situation has improved significantly in recent days as market demand has fully started in the process of declining market inventory.” By the end of March, our sales have exceeded 1 billion.” We can create a good performance this year, said Wang Yongfu, chairman of Beijing PUD Metal Group. We did not lose money in January and February and entered in March. A normal period of development. Moreover, the current steel trade industry is not as profitable as people think, and many nameless small enterprises are gradually getting bigger in the process.

Before that, the steel market demand in March failed to start as expected, far from the expected market recovery.

At the beginning of March , stimulated by the “five national” rules of strict control of real estate, coupled with the continuous suppression of steel inventories, the Chinese steel market continued to decline.

Until March 20, there was a wave of blowout in the construction steel market, and then the market continued to rise. The upward momentum lasted for a few days, but soon turned around and fell again.” The steel market has been fluctuating repeatedly lately. Up today, down tomorrow. It’s like giving you a sweet date today and a slap in the face tomorrow.” Some steel traders even complained that this market is like “Ado can’t afford it”, thinking that this market is real. The time to heat up is estimated to be in mid-April.

This spring, the market is slow to move, some traders believe that because of the two national meetings, many governments have temporarily restricted the progress of outdoor projects for various considerations. Most traders reflect that with the end of the two sessions, various regulatory measures are liberalized, the climate is warming up and specific policies are implemented. Downstream industries in the steel market may enter the peak construction period, which may usher in a real release of steel demand, thus driving steel. Prices stop falling and rebound.

Steel market contradictions between supply and demand have improved

With the gradual release of downstream steel demand and the acceleration of the steel de-stocking process, these positive signals have brought some confidence to the steel market. As a result, the mindset of traders has also improved, similar to the previous downturn in the steel market. The significant reduction in panic operations will all contribute to the steady recovery of steel prices.” Steel prices have risen a lot in recent days, and the transaction situation is not bad.” Wu Di, deputy general manager of Beijing Zhongyuan Guanglu Trade Co., Ltd, told reporters that he was in a good mood these days and felt that the steel market had slowly improved. And he is optimistic about the market expectations for April and May.

The foothold of steel prices will eventually return to the changes in supply and demand in the steel market. Compared to previous years, the de-stocking of steel in China was significantly delayed in 2013. This is mainly due to the impact of the changes in the national “two sessions”. Going forward, the pace of steel destocking will be further accelerated in the latter part of the year as the downstream terminal industries begin to accelerate. Although the current inventory is still at a high level, the suppression of steel prices should be appropriately relaxed.

According to Lange Steel statistics, as of March 29, the total social inventory of construction steel in 29 key cities nationwide was 12,719,100 tons. From the viewpoint of inventory growth rate of each variety, the rise of wire rod, rebar and coil stock has slowed down, indicating that downstream construction projects have started and market demand is slowly recovering.

At the same time, steel mills showed signs of production reduction and supply pressure was eased. At present, some steel mills have increased their overhaul efforts, and the enthusiasm of steel mills to limit production and hedge against risks has increased significantly. Some small and medium-sized steel mills have also taken active measures to limit production. Therefore, it is a probable event that crude steel production will start to decline in the future. Favorable to the development of the steel de-stocking process.

According to the statistics of China Steel Association, the average daily crude steel output of member companies in mid-March was 1,677,600 tons, and the national crude steel output was estimated to be 2,063,700 tons, down 1% from last month. From the actual situation of the market, the crude steel production of key enterprises in early and mid-March declined due to order loss and serious losses. Some small and medium-sized steel enterprises have also increased their efforts to check and reduce production, and the adjustment of production will be gradually reflected in the later stage.

Of course, there are a few traders worried that the current local version of the country’s five major house rules are still being introduced one after another, and the impact of other news may appear from time to time. At the beginning of the downstream terminal release, there is still a certain amount of inventory to be consumed. The purchase of steel is also driven by the price, the terminal demand release is still in an unstable stage. Therefore, the market still needs to be treated with caution.

Steel market improved in April

For the domestic steel market in April, most steel traders believe that the current bearish market dynamics have basically exhausted, the two sessions have ended, the new government will introduce a series of policy implementation details, many previously identified investment projects are also about to start, from the end of March, ** in mid-April only belatedly, and with the various projects into the substantive construction phase, long-term holdings of steel demand will also usher in a large-scale release.” Our daily shipments have returned to normal levels and even higher, and all end users are ordering our goods.” said Xiao Wenting, general manager of Beijing Wanshunfa.” There is little room for steel prices to fall. The demand for steel will gradually increase. I think there should be a wave of price increases in April, which has a lot to do with falling inventories. The price may reach 3800 or higher.”

Some steel traders believe that the temperature will gradually pick up in April around the world and the weather will turn warm, which is the **** season for construction projects. This year, municipal infrastructure will usher in the climax of concentrated construction. According to incomplete statistics, there are more than 70 subway lines under construction across the country, with a total investment of more than 800 billion. If we add the approved projects, the investment will exceed 1.5 trillion yuan. Therefore, with the intensive construction of metro projects around the country, steel demand will be released and steel prices will rise again.

The seasonal demand started late this year, and the construction market gradually became active after the two sessions. It is expected that infrastructure will continue to recover after the second quarter, but the strength will be relatively mild. In the interview, most traders said that the current daily turnover of steel has basically returned to the normal level of last year, and this year’s peak season may be postponed to May-June.

In this regard, Lange steel network information director horsepower that the current external environment is gradually improving, steel market pressure on steel futures and spot itself gradually reduced, demand gradually started, especially in the past seven years, domestic steel prices in the spring will have a decent rising market, this year will not be an exception. Although steel prices will be repeated in the short term, but overall steel prices are fluctuating bottoming out and could rise at any time. early April may appear **. However, at the current price level, steel prices continue to rise relatively limited space. It is expected to be around 200 to 300 yuan, and the overall price increase is smaller than in previous years.

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