Both production and inventory have decreased, and Baowu Steel has slightly raised steel prices.
Sina Finance reported on the morning of September 20 that Ansteel Corporation announced its product pricing policy for October on the 19th, with major products increasing by 50-380 yuan/ton. Thus, the pricing policies of the three major steel companies, Baosteel, Wuhan Steel, and Ansteel, have all been released, mainly featuring slight increases.
2019-02-23
Sina Finance reported on the morning of September 20 that Ansteel Co., Ltd. (8.26,-0.03,-0.36%) announced its product price policy for October on the 19th, with major products increasing by 50-380 yuan/ton. Thus, the price policies of the three major steel companies, Baosteel, Wuhan Steel, and Ansteel, have all been released, mainly with slight increases.
Wuhan Steel's price announced on the 15th increased by 100-400 yuan/ton. For major plate prices, both Wuhan Steel and Ansteel raised the prices of hot-rolled and cold-rolled products by 100 yuan, while Baosteel's increase was slightly higher. Due to previous market surges caused by news of power restrictions and production cuts at steel mills, leading to direct price increases at the mills, the downstream market and subsequent reactions have not been satisfactory, causing large steel mills to be relatively cautious in their price positioning.
According to data from the National Bureau of Statistics, in August, the national crude steel output was 51.74 million tons, a decrease of 0.19% month-on-month; pig iron output was 48.84 million tons, an increase of 2.65% month-on-month; and steel production (including repeated materials) was 69.68 million tons, an increase of 2.97% month-on-month. In August, the average daily crude steel output was 1.666 million tons, marking the fourth consecutive month of month-on-month decline. With domestic steel demand continuing to grow, the supply-demand contradiction in the steel market has eased, driving steel prices from decline to increase.
A report released by the China Iron and Steel Association yesterday showed that at the end of August, the social inventory of five types of steel in 26 major steel markets nationwide totaled 14.90 million tons, a decrease of 40,000 tons month-on-month, a decline of 0.3%. Among them, the inventory of long products continued to decline, with rebar and wire rod inventories decreasing by 4.0% and 8.4% month-on-month, respectively; the inventory of medium and heavy plates and hot-rolled sheets in flat products continued to rise, with increases of 7.0% and 4.5%, respectively, while the inventory of cold-rolled thin plates increased by 0.8% month-on-month.
However, due to the impact of the cancellation of the export tax rebate policy, steel exports have declined for three consecutive months. According to customs statistics, in August, China exported 2.8 million tons of steel, a decrease of 1.75 million tons month-on-month, down 38.46%. In the future, the quantity of China's steel exports is expected to decline further.
After experiencing a price decline from May to July, in August, the prices of raw materials for steel production rose again. Among them, the spot price of imported iron ore (63.5% Indian fines) was 1160 yuan/ton, an increase of 40 yuan per ton month-on-month, a rise of 3.57%; the prices of domestic iron concentrate, metallurgical coke, scrap steel, and steel billets also increased month-on-month by 9.22%, 3.03%, 3.95%, and 3.52%, respectively; according to customs statistics, the average landed price of imported iron ore in August was 139.65 USD/ton, although it decreased month-on-month, it remained at a relatively high level.
The China Iron and Steel Association report noted that compared to the same period last year, except for metallurgical coke prices being slightly lower than last year, the prices of iron ore, scrap steel, steel billets, and coking coal were all higher than the same period last year, especially the spot price of imported iron ore, which increased by 54.67% year-on-year, and the price of domestic iron concentrate, which increased by 40.63% year-on-year. Due to the significant rise in raw material prices, the production costs of steel enterprises have continuously increased, leading to a significant decline in corporate profitability, with cost pressures providing substantial upward momentum for steel prices.
The China Iron and Steel Association pointed out that the recent rebound in market steel prices is the result of sustained demand growth and improved supply-demand relationships. Steel enterprises should pay attention to adjusting the variety structure and controlling effective capacity, reasonably adjusting ex-factory prices, and maintaining relative stability in the steel market.
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