Northern heating limited production of steel off-season prices hit a new high of 6 years
Enter the off-season off-season, steel prices rise without falling.
Recently, the prices of billet and third-grade rebar in Tangshan, Hebei Province reached 3830 yuan and 4210 yuan respectively, up 40% and 35% respectively over the same period of last year, an increase of about 150% over the same period of 2015.
According to the data from the Western Electric Shinkansen, a commodity e-commerce platform, the steel price index reached 4,700 on November 28, the highest level in 6 years, an increase of about 40% over the same period of last year. Similar increases have also occurred in billet and rebar.
Currently, it should belong to the off-season sales of steel products. Take Hebei as an example. On November 1, 2017, the PMI of Hebei's steel industry in October 2017 released by Hebei Metallurgical Industry Association was 45.4%, decreasing by 5.7% MoM and ending the five-month expansion In October, the new order index was 47.9%, a decrease of 2.0 percentage points qoq. The downstream steel industry was affected by environmental protection policies and the drop in demand led to a decline in new orders.
In the case of demand off-season, why the price instead of rising shocks? Goldlink Steel analyst Li Qun pointed out that this is related to the current slowdown in production, the market once the wind took the opportunity to adjust the price.
Production decreases, the steel price is not short off-season
According to report, as the temperature of the cooling air decreases, the demand for steel decreases due to the reduction of construction, and the steel industry has entered the off-season in the year. However, the price of steel is not weak in the off-season.
According to the data of West New Shinkansen, the price index for steel products was 4700 and hit a new high of 6 years on November 28. The price index of steel billet was 3830, only slightly lower than that of 3860 on November 15, and the overall steel price index was still at a high level.
November 27, Tangshan third-class rebar price of 4310 yuan per ton, 3000 yuan per ton over the same period last year achieved a substantial rise in the same period the price of billet in Tangshan 3840 yuan per ton, also significantly higher than the same period last year 2700 Yuan level.
The emergence of such a price situation is related to the current decline in output.
According to the data of the newspaper, the operating rate of blast furnace in Tangshan is 56.82% recently, the utilization rate of building materials is 26.13%, the utilization rate of strip steel is only 67.9%, and the operating rate of profiles is 43.48% .This is in line with the steel production capacity utilization in Q3 released by National Bureau of Statistics National Bureau of Statistics said earlier that in the third quarter, ferrous metal smelting and rolling processing (steel) capacity utilization was 76.7%, up 4.4 and 1.0 percentage points qoq, respectively, extending six quarterly recovery trend , The highest level since 2013.
Lager Steel's chief power horsepower believes that the current northern region to limit the implementation of heating steel production, making the overall decline in production, which led to price fluctuations, while profit growth is also better.
National Bureau of Statistics data show that in October the national daily steel production was 2.961 million tons, the lowest level since March, the first time below 3 million tons level, down about 6% over the same period last year.
Customs data also showed that in October, China exported 4.98 million tons of steel products. Its monthly export volume was 160,000 tons less than that of the previous month, down 3.11% month-on-month and down 35.24% year-on-year.
Steel expert Mazhong Pu believes that the current steel demand is off-season, demand is declining, but the current steel production is also slowing, and the downstream industries, including automobiles, appliances and other steel did not reduce.
'There was no drop in demand in the manufacturing sector at the lower end of the steel sector, and as the steel production slowed down, the balance of supply and demand remained tilted to the steel industry, causing steel prices to go up,' he said.
According to a report released by China Iron and Steel Logistics Special Committee, the PMI for the steel industry in October was 52.3%, a slight decrease of 1.4% from the previous month and the second consecutive month of decline. However, the PMI for the steel industry was above 50% for six consecutive months The specific production index and new orders index fell slightly, the new export orders index rose significantly but still in the 50% contraction range.
In Hebei alone, the PMI for Hebei Iron and Steel was 45.4% in October, down 5.7 percentage points from the previous quarter and the index dropped back to the contraction range once again in two consecutive quarters, with a marked drop in the industry's economic prosperity. Among the sub-indices, the output index and raw material purchasing The price index dropped sharply to the contraction range, the new orders index and finished goods inventory index fell slightly contracted range, new export orders index has risen but still in the contraction range.
To capacity to promote industry profitability
In the steel prices are still rising, the production of heating capacity of the case next year to capacity situation?
According to 21st Century Business Herald reporter, the state plans to remove 1-150 million tons of steel production capacity in three to five years. In fact, in 2016, it removed more than 60 million tons and the target for 2017 is 50 million tons. At present, it has already surpassed its completion. Click here to see a limited number of under-production capacity to be removed by 2018. The completion of the above-mentioned capacity-elimination task does not include the production of 60 to 100 million tons of strip steel until the end of June this year.
According to Li Qun, a steel analyst at Golden Link, as steel goes to more capacity in previous years, it will have less capacity to go production by 2018, but the difficulty will be even greater.
'Steel has a similar rebar futures market, changes in futures have a significant impact on the spot price, but the price will not suddenly soar, it must be an orderly rise, and then reach the high, the market will continue with the shape of the high Callback, 'she said.
Mazhongpu pointed out that the overall pressure on China's steel industry overcapacity weakened to remove excess capacity has achieved initial results, the steel industry in a profitable state.
Wang Dayong, secretary general of Hebei Metallurgical Industry Association, believes that in October, the production limit of steel products in the Hebei-based steelmaking market was implemented in advance and the price of steel products fluctuated at a high level and the demand for raw materials was weaker than expected, with the prices declining. Coke prices plummeted , The billet price soared, the overall cost down, the efficiency of the steel business continued to improve.In November, North China heating season full environmental protection of the full landing on the steel market in Hebei will be more obvious inhibition of supply, steel prices continue under pressure shocks.
