Why steel prices are difficult to promote the rise of steel prices

In recent days, the domestic steel market has been relatively weak, and the expectation that the steel price may rise under the impetus of the steel mills' price rise in the end of the second half will eventually be lost. Last week, the centralized introduction of price policies by Baosteel, Anshan Iron and Steel, Wuhan Iron and Steel, and Bengang Steel in September only brought about a small ripple in the market. The increase in steel prices was only around RMB 50/ton, and the timeliness only maintained. A few days. On the 24th, Hebei Iron and Steel Group issued the settlement price in August and the order price in September. Plates and hot coils all rallied, and September prices also increased in varying degrees. However, the market reaction was quite flat, and the market price remained unchanged. Maintain the situation of weaker decline.

The steel mills have increased their prices, and the market has fallen in price, exceeding market expectations. It has also caused changes in the expectations of current distributors and the market’s expectations for September also began to diverge. Before the one-sided view that the recent steel market is in an uptrend channel, the prospect of a phased high in September may gradually be suspected of being replaced, and even the prospect of the current steel market ending its early rally and entering a broad shock or a weaker downgrade will come. It is closely related to the weak situation in which the recent steel mills rose and the market fell.

So, what caused the current trend of the steel mills to be different from each other? In fact, the price increase of steel mills, the market price, is merely a market phenomenon. After all, the market sent steel prices to steel mills. Too high expectations did not fully take into account the current supply and demand situation and the uncertain futures contract market. Eventually, there was a lack of preparedness for the downturn.

Specifically, first of all, the price of steel mills is slightly lower than previously expected. Regardless of whether the previous Baosteel's main varieties were flat or the recent calm steel mills faced with the previous market expectations, they would have been a lively price increase, but due to slightly lower than expected prices of leading steel mills. , And difficult to lift the market conditions, eventually evolved into a wait-and-see market down, steel-based stable situation.

Second, it was the unexpected slump in the forward contract market. Since the middle of last week, the domestic forward contract market has started to oscillate when the price adjustment of the leading steel mills has been exhausted, and near the end of the week, it has entered the continuation of the recent shocks due to the weakening of the external disk. The forward contract market continued to oscillate for a week and a week, which brought a significant blow to the spot market.

Again, the news and performance of the recent supply and demand side are not optimistic. From the perspective of supply, due to the continuous rebound of steel prices for five weeks, steel mill production capacity was released and production increased. In the first half of August, domestic crude steel increased by 77,000 tons from the end of July, and after the end of the three-month sequential decline, the domestic crude steel output again rose. At the same time, market demand has been even more depressed. In recent days, most of the country has experienced long periods of rain weather, which has also suppressed market demand to a certain extent. Undoubtedly, the resources put into the market in the future will inevitably increase, but the demand will not increase, the supply and demand will be imbalanced, and the steel price will obviously be difficult to rise.

It can be seen that the market conditions in the recent period have changed, and it is difficult for steel mills to raise prices to push up market prices, mainly because of the suppression of market negative factors. However, the recent weak market performance has caused market expectations to change, or it will have a negative impact on the future market trend.