Beijing, May 31 (Xinhua News Agency) (China Securities Journal reporter Dong Tian) domestic steel market continued to adjust the situation. As the southern region entered the rainy season, demand has fallen, steel mills are less motivated to produce. Listed steel enterprises said, steel prices and mine prices fell to form a “scissors difference”, electric furnace rebar and long process rebar prices have fallen to the cost line.
Steel prices callback
Raw materials, iron ore supply and demand to the gradual easing of the shift, port inventory rebounded, price shock fell. As steel prices continue to fall, steel profits significantly contracted, iron ore prices formed a certain repression. International steel market upward momentum has also slowed down, iron ore market fundamentals to weaken, iron ore prices are expected to maintain a weak short-term shock trend.
File photo, Xinhua News Agency.
For the recent steel price correction reasons, Valin Steel believes that steel is a fully competitive industry, steel prices are ultimately determined by supply and demand relations. Although demand remains strong, domestic capacity has been fully released this year, driven by high profits.
Lange iron and steel cloud business platform forecast, May 31 solstice on June 4, the domestic steel market will shock consolidation, long material prices will shock down, profile prices will rise slightly, plate prices will fluctuate steadily, pipe prices will fluctuate steadily. Lange Steel National Steel Composite Price Index is expected to fluctuate around 201.6 points, the average price of steel is about 5,540 yuan/ton. Among them, the long material price index is expected to fluctuate around 206.7 points, the profile price index is expected to fluctuate around 215.0 points, the plate price index is expected to fluctuate around 193.1 points, the pipe price index is expected to fluctuate around 212.5 points.
Profit compression
Lange Iron and Steel Network monitoring data show that as of May 28, the cost of molten iron in Tangshan steel mills (excluding tax) is 3504 yuan to 3603 yuan/ton, the average cost is 3537 yuan/ton; The cost of billet including tax is 4411.5 yuan to 4512.1 yuan/ton, and the average cost is 4461.8 yuan/ton, which is slightly lower than last week. According to the current factory price of steel plant carbon billet 4800 yuan/ton calculation, the price is higher than the average cost price of about 338 yuan/ton, the profit of steel mill was further compressed than last week.
It is worth noting that steel prices and mine prices fell to form a “scissors difference”, electric furnace rebar and long process rebar prices have fallen to the cost line.
Lange Iron & Steel Network believes that China’s highly concentrated sources of imported ore, prices continue to strengthen, seriously compress the profit of the steel industry, and lead to increased pressure on the production cost of downstream manufacturing, affecting the overall competitiveness of manufacturing products. From the present situation, it has become a consensus to break through the supply bottleneck of iron ore resources and develop domestic and foreign resources as a whole.
For the late trend of iron ore prices, Valin Steel pointed out that since this year, iron ore prices have risen more, the recent high began to pull back. Looking forward to the future, to promote carbon peak carbon neutrality, steel industry supply is facing a ceiling, iron ore demand growth is limited. In the early stage, the high profitability of steel production capacity release is sufficient, and the upward elasticity of production capacity is limited. Shipments are expected to rise year on year, according to production guidance from the four mines, which is expected to push iron ore prices lower.
Low carbon development
“To reduce carbon emissions in the steel industry, we mainly control crude steel production, increase the proportion of short-process electric furnace steel, and develop hydrogen metallurgy.” At the 11th China International Iron and Steel Conference, Lv Guixin, a first-level inspector from the Department of Raw Material Industry of the Ministry of Industry and Information Technology, said that for some low-value-added steel varieties, we can reduce exports and increase imports to make good use of steel in “cutting edge”. China’s annual crude steel output reaches 1 billion tons, with sufficient support capacity.
He Wenbo, executive chairman of the China Iron and Steel Association, pointed out that by the end of February 2021, 229 steel enterprises in China with a crude steel capacity of 620 million tons (159 in key regions with a crude steel capacity of 450 million tons) had completed or were in the process of implementing ultra-low emission transformation. 110 steel enterprises in key regions (with a crude steel production capacity of 350 million tons, accounting for more than 60% of the total production capacity in key regions) have completed or are carrying out evaluation and monitoring. “If China’s steel industry is to fully achieve ultra-low emission transformation, it will need to invest about 260 billion yuan and increase operating costs by more than 50 billion yuan every year.” He Wenbo pointed out.
China’s crude steel output reached 1.065 billion tons in 2020, according to the National Bureau of Statistics. In recent years, the steel industry resolutely eliminated backward capacity, capacity utilization rate has been maintained at a high level. Significant progress has been made in promoting green development through the adjustment of industrial structure, the improvement of energy structure, the upgrading of ultra-low emissions and the transformation to low-carbon development. According to China Iron and Steel Association statistics, from 2015 to 2020, key statistics of steel enterprises average ton of steel comprehensive energy consumption cut by 58%, ton of steel smoke and dust emissions cut by 48%.
The personage inside course of study points out, steel price is decided by market supply and demand. Steel as a cost-effective, large supply of basic materials, demand prospects are still optimistic. And carbon peak, carbon neutrality will bring the industry supply “ceiling”, industry supply and demand pattern will be improved.
Source: Xinhua News Agency
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Post time: 02-06-21