How long can China's steel prices continue to soar?

Domestic steel prices continue to keep skyrocketing, Tangshan billet prices have risen by another 50-60 yuan, Pazhou forward strip prices have risen by 150 yuan, Puyang Steel's mid-plate prices have risen by 70 yuan, and Wuan Mingfang’s round steel prices Increased by 100 yuan, the ex-factory price of Qian'an Jiujiang wire rod rose by 100 yuan, Tangshan Shandong Haite rebar factory price rose by 90 yuan, Shanxi Liheng high-wire factory price rose by 80 yuan, Shandong Laiwu Steel Yongfeng, Shi Heng and other steel mills rose 80 yuan and so on and so on.

The national steel prices, especially the prices of steel in the north, have basically risen. The cumulative increase of the Spring Festival up to now is quite impressive. Beijing rebar prices have risen by nearly 400 yuan from the lowest point, and Tangshan billets have risen by 230 yuan from the lowest price. There are two main factors affecting the price increase: First, demand gradually recovers, and small and medium-sized traders have not stocked during the Spring Festival, leading to a concentrated release of demand in the short term, and centralized purchases driving prices higher; second, the Ministry of Environmental Protection guarantees 3 At the end of the month, the air quality in North China reached the standard, and stricter environmental protection inspections were adopted, which led some steel companies to restrict production or even stop production. The first influencing factor is that the author expected it before the holiday season. There are very few small and medium-sized traders in stock this winter. The goods are basically concentrated in the hands of small-scale steel plants and small and medium-sized steel plants. The small steel mills have difficulty selling this year. The phenomenon of production cuts or even production cuts in winter is relatively common, making spot stock pressures not so large after this year's holiday season in all regions. Traders with intermediate goods and terminal traders have no goods in their hands, and start working at the site or project after starting work. The purchase of steel and steel mills has gradually led to price increases. After the price shows signs of rising, the atmosphere of grabbing goods has led to an increase in the rate of price increase. The impact of the second influencing factor was slightly higher than the author's expectation. I did not expect the impact to be so great. For the new environmental protection law will be implemented in the market is expected, but the State Department of the State Council on the tough position of pollution control is beyond market expectations, especially in late March due to the International Olympic Committee to visit Beijing, Zhangjiakou 2022 Winter Olympics It will bid for preparations. The environmental protection department will strictly inspect this node and stationed in Chengde, Zhangjiakou, Tangshan and other major areas. Checking the discharge conditions of steel mills will directly ignite market sentiment, leading to a continuous and significant increase in steel prices nationwide, especially in North China.

Chenggang shut down one 2,500 cubic meter blast furnace and three small blast furnaces of 450 cubic meters or less on Friday; in addition, Xuan Gang has changed a bar production line into a steel production line this month, mainly producing angle steels; one of the wire rod production lines has been optimized. Line production. According to the Hebei Iron and Steel Group internal high-level sources, the large blast furnace of Chenggang 2500 cubic meters will be resumed in recent days, but the situation of the three small furnaces is not clear, Hebei Province has a policy of eliminating 450 cubic meters or less of blast furnaces. Great influence. Since April, Xuangang’s rebar and coil shipments have only reached 50% of the normal agreement, and Chenggang has only reached about 60%. The Beijing-Tianjin region will declare that the resources of rebar and coils will be subject to Great influence, even out of stock.

The news about environmental protection in recent days includes: According to news, the city’s environmental protection inspection work in Langfang is progressing in an all-round way. The main job requirement is to carry out a comprehensive inspection of the seven aspects in accordance with the principle of “who checks, who signs and who is responsible”. : Environmental supervision at all levels of government, discharge of pollutants from all pollutant discharge units, cleanup of illegal and illegal construction projects, construction and operation of various types of industrial park construction projects and ancillary facilities, and impacts of various types of resource development and utilization activities on the ecological environment, hindering the environment Supervision and law enforcement "local policy" cleared up the abolition of the situation, the people reported key cases of complaints and local long-standing outstanding environmental problems. This may be the most important reason for the sharp increase in the price of strip steel in advance in Bazhou this morning. In addition, according to online news, entrusted by the Ministry of Environmental Protection, the East China Environmental Supervision Center has conducted special inspections on Jiawang District, Tongshan District, Xuzhou City, Jiangsu Province against 15 steel plants, 7 coking plants, and 35 pelletizing plants for 23 concentrating plants. The factory, five zinc plants and 20 other high-energy-consuming, high-polluting enterprises, all enterprises must be shut down and rectified before April 8, 2015 according to the “Environmental Protection Law.” No matter whether the standards are met or not, they must be executed and reported to Jiangsu. Provincial People's Government, Xuzhou Municipal People's Government.

It should be said that this year's new environmental protection law must be strictly enforced. Before and after the country's exchange of the minister of the Ministry of Environmental Protection, or before and after the Ministry of Environmental Protection interviewed the mayors of Linyi and Hebei Chengde, and then Linyi asked all polluting enterprises in the region. The suspension of production and rectification, including Lincang Sande, Jiangxin, and Hujing, have all been affected. The environmental protection turmoil that began in late March has basically swept across North China, stimulating steel prices to rise sharply.

Today is March 24, a few days away from the completion of the International Olympic Committee's investigation. At least in the past few days, environmental protection inspections for steel plants in North China will continue. Today, the price of spirals in the Beijing-Tianjin region has declined slightly due to too fast growth rates on the weekends and Mondays, and the volume of transactions has also shrunk. The turnover of 11 large Beijing households has dropped from 21,100 tons to 14,400 tons, which has fallen. 0.67 million tons, sales of high-priced resources were significantly hindered. However, from the sales of steel mills in Hebei, Shandong, and Shanxi, most of the steel mills sold more hotly, and there was even a case of closures and no goods available for sale. Judging from today's situation, the continued upward growth of steel prices should not be a problem. In particular, the bill prices of steel billets and small and medium-sized steel mills in North China can continue to rise, but the increase will be significantly narrower than in previous days, and the price increase is expected to be promising. Until this Thursday, Friday.

The most important stimulating factor for the recent steel price increase is the centralized inspection of the steel plant's environmental protection. After the centralized inspection in late March may be over, the continuous rise in steel prices caused by this short-term behavior will probably come to an end. However, although the centralized inspection is over, pollution control and environmental protection inspection will be the topic throughout the year for the domestic steel industry. The author was told in a communication with a state-owned large-scale steel plant that for many local officials, the environmental protection pressure that has been on top of this year has already ranked first, even exceeding the task of guaranteeing economic growth. This year, the state is responsible for environmental protection and The importance of pollution control is evident.

Recently, the differentiation of black-type varieties has become more obvious, raw material prices have been significantly weakened, and rebar prices have rebounded. After the early adjustment of the steel market, the characteristics of the phased bottom were increasingly evident. With the improvement of demand in the steel market, it is expected that steel prices will continue to rise.

Demand continues to improve

Benefit from the acceleration of seasonal recovery in demand, steel market sentiment has picked up significantly. First of all, the terminal demand accelerated release, and the social steel stocks declined. Last week, the social decline of steel stocks increased to 2.2%, of which rebar shipments improved significantly and social stocks fell by 2.8% from the previous quarter. Secondly, last week, Shanghai's terminal companies purchased 15500 tons of wire rods and rebar, a 9.40% increase from the previous quarter, and have increased for three consecutive weeks. Finally, the domestic steel market is gradually warming up, and the prices of all major steel products are steadily increasing, among which construction steels have gained a lot.

Although the real estate market is sluggish, and the government’s work report downgrades 2015 economic growth targets, the market’s demand for the steel market is more pessimistic, but the credit is more than expected to relax, indicating that the government is more likely to support infrastructure investment, and the recovery of steel market demand is expected to continue.

Supply pressure relief

Under the new normal economic situation, the steel industry is undoubtedly a key area of ​​structural adjustment and upgrading. Recently, the Ministry of Industry and Information Technology had publicly solicited opinions on the adjustment policy of the steel industry, which clearly stated that the degree of concentration of the steel industry should be greatly increased. Although spot steel prices continued to increase, steel mills' profits have begun to improve, but this did not ignite the enthusiasm of the steel mills to resume production. The national operating rate of blast furnaces continued to decline slightly to 84.94% last week.

In terms of costs, the demand for iron ore was significantly weakened due to the impact of the shutdown of steel mills and maintenance and environmental protection issues. However, the price of iron ore has fallen to the cost range of the mainstream mining companies, and it is more difficult to lower prices in the later period. The steel market's concerns are expected to ease.

Environmental issues continue to ferment

The Ministry of Environmental Protection will carry out special inspections of atmospheric pollution prevention and control in Beijing, Tianjin, Hebei and surrounding areas in the near future. The inspection results will serve as a basis for local government assessment. 2015 is obviously an important timeline for environmental protection. In addition to the formal implementation of the new environmental protection law, local governments will also take stronger measures in economic restructuring and environmental governance. In addition, the shutdown of Chengdu Steel and Vanadium means that starting from 2015, state-owned enterprises have also joined the ranks of production capacity.

The environmental protection management and steel production capacity exceeds market expectations. In addition, the steel companies themselves have limited funds and their production enthusiasm is not high, which effectively eases the pressure on the steel market.

As a general observation, the recovery of demand during the peak season and the steel industry's capacity to boost the steel market boosted confidence in the steel market. In addition, the effects of steady growth policies became apparent. The steel market experienced a decrease in supply while demand increased. It is recommended that investors continue to hold more than one order.