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Mid September steel price rises or continued moderate recover

Sep 14, 2018

 According to China Metallurgical News - China Steel News Network Information

 
 
 
Last week (September 3rd ~7), the adjustment of steel futures prices rose moderately. After a series of 3 days of "slump", the results of the continuous increase in the previous days began to slowly adjust and resume. The main contract price of steel futures rose to 4200 yuan / ton. Relatively speaking, the rebound momentum of rebar futures prices is relatively strong, hot-rolled coil futures price recovery is only about half of rebar, which makes the main contract between the two tonnage price gap has been widened to nearly 100 yuan.
 
 
 
Prices of screw steel futures rose sharply on Thursday night after adjusting slightly for the first few days of last week. Prices were volatile after peaking on Friday. The latest price of the main 1901 contract was 4244 yuan / ton, up 0.71% from the settlement price of the previous trading day, and 136 yuan / ton, up 3.31% from the same period of the previous week. The highest and lowest prices were 4244 yuan / ton and 4184 yuan / ton respectively, up from the same period of the previous week. It was 126 yuan / ton and 104 yuan / ton higher, up 3.06% and 2.55% respectively, and closed at 4186 yuan / ton in the afternoon, up 2.45% from the same period in the previous week, with the highest price rising to 4253 yuan / ton. The latest prices for the 1810, 1811, 1904 and 1905 contracts were 4498 yuan / ton, 4480 yuan / ton, 3985 yuan / ton and 3917 yuan / ton, respectively, up 0.72%, 0.86%, 0.53% and 0.77% from the settlement price on September 6.
 
 
 
Hot-rolled coil futures prices fluctuated slightly in the first few days of last week, rising sharply on Thursday night, falling sharply after peaking on Friday morning and recovering slightly at the close. Data show that the latest price of the main 1901 contract for hot rolled coil sheet was 4148 yuan / ton at 23:00 am on September 7, down 0.67% from the settlement price of the previous trading day by 28 yuan / ton, up 1.37% from the same period of the previous week by 56 yuan / ton; the highest and lowest prices were 4154 yuan / ton and 41100 yuan / ton, respectively, compared with the same period of the previous week. The increase of 60 yuan / ton and 59 yuan / ton was 1.47% and 1.46% respectively, and the closing price in the afternoon was 4114 yuan / ton, 50 yuan / ton higher than the same period in the previous week, up 1.23%, with the highest price rising to 4234 yuan / ton. The latest prices for the 1810 and 1905 coil sheets were 4319 yuan / ton and 3899 yuan / ton, respectively, down 0.35% and 0.20% from the settlement price on September 6.
 
 
 
There will be "restoration" after the "collapse". In fact, in the last week of August, steel prices fell sharply not only because of the weakening of steel production restrictions, but also because steel prices rose too much and too fast in the early days. Similarly, the modest rise in steel futures prices last week is actually a reasonable price fixing. From the actual transaction situation, low price transaction smoothly, and higher price transaction resistance increased significantly. It should be noted that this round of steel prices have been rising for more than two years, the early low-lying gap has been fully filled, there are technical callbacks. At the same time, the supply of steel resources is increasing rapidly, making the contradiction between supply and demand more and more serious.
 
 
 
The impact of the local environmental protection and production restriction policy on the steel market has both advantages and disadvantages. On the one hand, the market rumors that some areas require differentiated production restrictions, strictly prohibit all, pollution emission performance of the industry is obviously better than other enterprises in the same industry benchmark enterprises can not be restricted production. This may exacerbate the contradiction between supply and demand and curb the rise in steel prices. On the other hand, some areas emphasized that the proportion of steel enterprises to limit production in September is not lower than that in August, explicitly demanding that steel mills stop production in August and resume production without authorization in September. In September, those areas that did not complete their tasks in August increased the intensity of production suspension; at the same time, steel mills that resume production without authorization have been criticized by name. This will be conducive to the stability of supply and demand and increase the price of steel.
 
 
 
From the stock situation, the current actual stock of steel such as rebar and hot rolled coil has a slight upward trend. The monitoring data of steel research institutes show that, as of September 7, the total inventory of building steel in 29 key cities in China rose by 0.99% and the total inventory of hot rolled coil increased by 0.5%.
 
 
 
Nevertheless, as the steel spot inventory level is not actually high, the industry is still optimistic about late demand expectations, market mentality is generally relatively stable, strong willingness to bid. The current situation is that the driving force of rising prices coexists with the pressure of falling prices, and it is inevitable that steel prices will continue to fluctuate and adjust. However, as the macro-environment and the supply and demand of resources have not changed significantly, the steep rise and fall in steel prices will be unsustainable. Therefore, under the general trend of the domestic steel market, the author predicts that steel futures prices may continue to rise after moderate adjustment in mid-September.
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