The current rebound in steel prices

From the beginning of March, the prices of domestic steel products continued to decline, creating new lows during the year. The market was pessimistic and the traders had difficulties in shipping. After entering March, the market is still warm and there is no obvious improvement. Merchants are subject to the dual pressures of inventory and capital. In the case of low demand, passively cut sales and become a helpless choice. However, the long-term capital markets such as spirals and electronic disks continued to decline and fell sharply. As a result, the attitude of many traders changed, and the bearish outlook for the market increased, and market confidence weakened. In addition, end-users, the continuous decline in the spot market, forced the downstream to take delivery of goods tend to be cautious, low purchasing intent. As a result, market transactions are difficult to improve and continue to maintain a low level.

Specific to the price, as of March 7, Shanghai 8mmHRB400 plate Screw transaction price of 3190 yuan / ton, compared with the previous weekend fell 70 yuan / ton; Ф6.5mmHRB300 high-line transaction price of 3170 yuan / ton, compared to the previous weekend Declined by RMB 10/t; the transaction price of 20mmHRB400 rebar was RMB 3,110/t, which was RMB 50/t lower than the previous weekend; the transaction price of hot-rolled 5.5*1500 HRC was RMB 3,400/t, which was flat from the previous weekend; 1.0* The transaction price of 1250 Prairie was RMB 4,190/ton, which was RMB 30/ton lower than the previous weekend.

Since the Spring Festival this year, the spot market price of steel products has continued to fall. It has basically fallen unilaterally, and prices have been dropping. The main reasons lie in the following aspects: First, the indefinite policy factors and sluggish market demand have resulted in low market turnover, which is insufficient to support the stable operation of prices. The second is the sharp increase in short-term arrival, the high inventory of traders, the conflict between supply and demand, and increased market pressure. Third, the four-month fall caused the pessimism of traders, and the phenomenon of panic selling reappeared. Fourth, the issue of credit issues in the national steel trade market broke out, further increasing the financial pressure on the steel trade industry, and the steel trade capital chain was severely strained.

For the next week's trend, the author believes that the current steel price is almost 3000 points, the market slowed down slightly, with the end of the **, the trend of steel prices will gradually clear.

First, demand is heating up, and destocking starts. After the **, the major market policies were landed, and the downstream industry will make clear arrangements for this year's production and business plan. With the warming of the air temperature and the end of the rain weather, the end-user operating rate gradually increased, and the purchase demand increased slightly. Market feedback, although the overall price is still in the process of decline, but the company's shipments have significantly improved over the previous period, promoting a slight rebound in steel prices in some areas, reflecting the market demand is gradually warming. At the same time, the data shows that the total stock of the market fell to 20.57 million tons last week, ending the 10 consecutive weeks of Masukura, and the destocking process began.

Second, the policy is basically on the right side, which will help steel prices rebound. This year's Premier Li Keqiang’s government work report put forward the goals and tasks for economic growth in 2014. The GDP growth target reached 7.5%, indicating that the government will not tolerate a sharp decline in economic growth; arranging a new fiscal deficit of 1.35 trillion yuan will play a catalytic role in boosting domestic consumption; while the development of social security housing and urbanization requires steel. City demand will play a boosting role; eliminate outdated steel production capacity of 27 million tons, control haze, inhibit the continued expansion of steel production capacity and reduce the steel market supply pressure.

On the whole, after entering March, there is a slight upward trend in market demand. At the same time, steel prices are expected to stop falling and stabilize in the short term due to rising prices of billets and other raw materials.