In April, the demand for steel in the domestic market was strong, and the price of steel continued to rise, and the increase was greater than that of the previous month. Since the beginning of May, due to the increase in market expectations, the price increase of steel products has further increased after the "May Day" holiday, but it has fallen sharply in the third week.
1. The domestic steel price index rose month-on-month
According to the monitoring of the Iron and Steel Association, at the end of April, the China Steel Price Index (CSPI) was 148.88 points, an increase of 12.60 points from the end of March, an increase of 9.25%; compared with the same period of the previous year, an increase of 52.26 points, an increase of 54.09% (see Figure 1) .
(1) The prices of long products and flat products have both risen, and the increase of flat products is higher than that of long products
At the end of April, the CSPI Long Products Index was 151.39 points, an increase of 11.76 points month-on-month, an increase of 8.42%; the CSPI Plate Index was 150.31 points, an increase of 14.20 points, an increase of 10.43% month-on-month, 2.01 percentage points higher than the increase of long products; Compared with the same period, the long product index rose by 48.90 points, an increase of 47.71%; the plate index rose 57.81 points, an increase of 62.5%.
(2) Prices of major steel products have continued to rise
At the end of April, the prices of all the eight major steel varieties monitored by the Iron and Steel Association continued to rise. Among them, the prices of medium and heavy plates and hot-rolled coils rose by 596 yuan/ton and 631 yuan/ton respectively from the previous month; prices for high-speed wire, rebar, angle steel, cold-rolled sheet, galvanized sheet and hot-rolled seamless pipe The increase was relatively small, with a month-on-month increase of 512 yuan/ton, 437 yuan/ton, 371 yuan/ton, 423 yuan/ton, 454 yuan/ton and 330 yuan/ton respectively.
(3) Changes in the steel price index in each week
In April, the steel price index fluctuated at a high level. In the first and second weeks, prices continued to rise, in the third week, prices fell slightly, and in the fourth week, the index rose from decline to increase. Since May, the index has increased after the "May Day" holiday, but it has fallen sharply in the third week.
(4) Changes in steel prices in major regional markets
According to the monitoring of the Iron and Steel Association, in April, the six major regional indexes of CSPI all increased more than the previous month. Among them, the northwest region increased by 9.66% from the previous month; the northeastern region saw a relatively small increase, with a month-on-month increase of 8.27%.
2. Analysis of the changing factors of steel prices in the domestic market
April is the peak season for steel consumption in the domestic market, and the downstream steel industry has strong demand, which drives the price of steel to continue to rise; the price of raw materials such as iron ore continues to rise, which promotes the price of steel.
(1) The main steel industry is stable and improving, and the demand for steel continues to grow
According to the National Bureau of Statistics, from January to April, the national fixed asset investment (excluding rural households) increased by 19.9% year-on-year. Among them, infrastructure investment increased by 18.4% year-on-year, real estate development investment increased by 21.6% year-on-year, and the newly started area of housing increased by 12.8%; in April, the value-added of industrial enterprises above designated size increased by 9.8% year-on-year in real terms. Among them, the general equipment manufacturing industry increased by 14.9%, the special equipment manufacturing industry increased by 10.2%, the automobile manufacturing industry increased by 7.7%, the railway, shipbuilding, aerospace and other transportation equipment manufacturing industry increased by 7.7%, and the electrical machinery and equipment manufacturing industry increased by 22.6%. The computer, communications and other electronic equipment manufacturing industry increased by 10.4%; the electricity consumption in the manufacturing industry increased by 12.7% year-on-year, an acceleration of 12.6% over the same period last year. On the whole, the national economy is steadily improving, and the demand for steel in the domestic market is strong.
(2) Steel production maintains a high level, and the supply and demand situation is basically stable
According to the National Bureau of Statistics, in April, the national output of pig iron, crude steel and steel (excluding repetitive materials) was 75.97 million tons, 97.85 million tons and 121.28 million tons, respectively, an increase of 3.8%, 13.4% and 12.5% year-on-year; on average; The daily output of crude steel was 3.262 million tons, an average daily increase of 7.5% month-on-month. According to customs statistics, in April, the country exported 7.97 million tons of steel, a year-on-year increase of 26.2%; imported steel 1.17 million tons, a year-on-year increase of 16.7%; net steel exports were 6.8 million tons, a year-on-year increase of 28.1%. From the overall situation, the domestic market supply and demand are basically stable.
(3) The prices of raw materials and fuels continue to rise, which will promote the price of steel
According to the monitoring of the Iron and Steel Association, at the end of April, the price of domestic iron ore concentrates increased by 94 yuan/ton from the previous month, the price of imported ore (CIOPI) rose by 23.3 US dollars/ton from the previous month, and the prices of coking coal and metallurgical coke increased by 65 yuan/ton and 129 yuan/ton respectively. Ton, scrap price increased by 264 yuan/ton month-on-month. Judging from the year-on-year situation, domestic iron ore concentrates and imported ore rose by 70.69% and 125.15%, respectively, the prices of coking coal and metallurgical coke rose by 16.36% and 38.24%, and the price of scrap steel rose by 49.73%. The continuous increase in the price of raw and fuel materials has also pushed up the price of steel.
3. The price of steel products in the international market continues to rise, and the month-on-month increase has expanded
In April, the international steel price index (CRU) was 275.2 points, a month-on-month increase of 29.2 points, an increase of 11.9%, an increase of 5.7 percentage points from the previous month; an increase of 129.5 points, an increase of 88.9%, an average increase Greater than domestic.
(1) The prices of long products and flat products continue to rise, and the increase in flat products is greater than that of long products
In April, the CRU Long Products Index was 233.8 points, a month-on-month increase of 6 points, an increase of 2.8%; the CRU Plate Index was 295.7 points, a month-on-month increase of 40.5 points, or an increase of 15.9%, which was 13.1% higher than the increase in the price of long products; Compared with the same period, the CRU Long Products Index rose by 76.2 points, an increase of 48.4%; the CRU Plate Index rose 155.9 points, an increase of 111.5%.
(2) Prices in North America, Europe and Asia have all increased, and the rate of increase has increased
1. North American Market
In April, the CRU North American Steel Price Index was 318.4 points, a month-on-month increase of 20.4 points, or 68%, an increase of 2.3 percentage points from the previous month; the US manufacturing PMI this month was 60.7%, although it was down 40 percentage points from the previous month, it still maintained Expansion situation. Among them, the production index fell by 5.6 percentage points, and the inventory index fell by 4.3 percentage points; at the end of April, the U.S. crude steel capacity utilization rate was 78.4%, an increase of 0.8 percentage points from the previous month. Among the major steel products in the Midwestern United States this month, the prices of long products have turned from flat to rising, and the prices of plate and strip products have continued to rise.
2. European market
In April, the CRU European Steel Price Index was 275.8 points, a month-on-month increase of 32.5 points, an increase of 13.4%, an increase of 10.1 percentage points from the previous month; the Eurozone manufacturing PMI was 62.9%, a month-on-month increase of 0.4 percentage points. Among them, the manufacturing PMIs of Germany, Italy, France and Spain are 66.2%, 60.7%, 58.9% and 57.7% respectively, maintaining an overall expansion trend. Among the main steel products in the German market this month, the prices of wire rods, rebars, small steels and section steels fell month-on-month, while the prices of plates and strips continued to rise, and the rate of increase increased.
3. Asian Market
In April, the CRU Asian Steel Price Index was 249.3 points, a month-on-month increase of 32.4 points, an increase of 14.9%, an increase of 5.4 percentage points from the previous month; Japan’s manufacturing PMI was 53.6%, an increase of 0.9 percentage points from the previous month; South Korea’s manufacturing PMI was 54.6 %, a month-on-month decrease of 0.7 percentage points; China's manufacturing PMI was 51.1%, a slight drop of 0.8 percentage points from the previous month. The prices of major steel products in the Indian market this month, except for cold-rolled coils and hot-rolled coils, the prices of other types of steel continued to rise.
Fourth, the analysis of the price trend of the later steel market
Affected by factors such as rising international commodity prices, loose global liquidity, and rising market expectations, steel prices in the domestic market rose sharply after the "May Day" holiday. In the later stage, affected by the expected decline and increased national supervision, steel prices are expected to gradually stabilize after adjustment.
(1) Domestic demand is generally strong, and the supply and demand situation in the later period is basically stable
From the perspective of international market conditions, this round of price increases is the result of multiple factors including the gradual recovery of the global economy, strengthening of market expectations, ample liquidity, and speculation. From the perspective of the domestic market, there has been no overall or trending change at both ends of the supply and demand of steel products, and the price of steel does not have the basis for sustained and substantial increases. Affected by the “three red lines” of real estate and the “two concentrations” of land supply in the construction industry, Henan is about to enter the high temperature and rainy season, infrastructure construction will slow down, and the shortage of automotive chips, the home appliance industry enters the off-season and other factors, steel demand There may be some weakening, but both ends of supply and demand are basically stable.
(2) Steel production maintains a relatively high level, and steel prices are unlikely to rise sharply
According to statistics from the Iron and Steel Association, in early May, the daily crude steel production (same caliber) of key steel companies increased by 0.75% month-on-month, and it is estimated that the country's crude steel output increased by 0.40% month-on-month. From the perspective of the supply-side situation, the "looking back" of iron and steel capacity reduction, the reduction of crude steel output, and environmental supervision are about to start, and it is difficult for the crude steel output to increase significantly in the later period. From the demand side, due to the rapid and large increase in steel prices since April, the downstream steel industries such as shipbuilding and home appliances cannot withstand the continuous high consolidation of steel prices, and the later steel prices cannot continue to rise sharply.
(3) The social stock of steel continues to decline, and the stock of enterprises has increased
Affected by the rapid growth of demand in the domestic market, steel inventory has continued to decline. In early May, from the perspective of social inventory, the social inventory of large varieties of steel in 20 cities was 12.49 million tons, a decrease of 3.0% from the previous month, and forty consecutive months of continuous decline, with a year-on-year decrease of 2.49 million tons, a decrease of 16.6%.
From the perspective of steel enterprise inventory, the iron and steel association's key statistics of steel enterprise steel inventory is 14.68 million tons, an increase from the first half of the month, an increase of 9.47%, an increase of 26.4% from the beginning of the year; an increase of 22,000 tons, an increase of 0.15%.
(4) The state strengthens market supervision and prices are expected to gradually stabilize
Premier Li Keqiang presided over an executive meeting of the State Council on May 19 to make arrangements to ensure the supply and price stability of bulk commodities, maintain stable economic operation, take multiple measures to strengthen the two-way adjustment of supply and demand, strengthen the supervision of the futures and spot markets, and take targeted measures in due course , To troubleshoot abnormal transactions and malicious hype. Strictly investigate and punish activities such as reaching agreements to implement monopoly, spreading false information, driving up prices, especially hoarding, etc., and publicly expose them. Steel prices are expected to gradually stabilize.
The main issues that need to be paid attention to in the later market:
First, the output of crude steel hit a record high, and the balance of supply and demand is facing challenges. From January to April, the national crude steel output increased by 15.8% year-on-year, and the growth rate increased by 145 percentage points in the same period last year. Among them, crude steel Nissan hit a record high in April. Iron and steel enterprises should comprehensively analyze the steel demand situation to maintain the smooth operation of the industry.
Second, the price of raw materials and fuels fluctuates at a high level, and the pressure for companies to reduce costs and increase efficiency has increased. According to the monitoring of the Iron and Steel Association, on May 19, the CIOPI imported iron ore price was US$211.05/ton. Although it fell slightly, it was up 3229% from the beginning of the year, far exceeding the increase in steel prices during the same period. The pressure for companies to reduce costs and increase efficiency is increasing.
Third, the implementation of import and export fiscal and taxation policies will gradually affect the market. From May 1, 2021, the Tariff Commission of the State Council has decided to adjust the tariffs on certain steel products, encourage the import of primary steel products, and restrict their exports. The Ministry of Finance and the State Administration of Taxation have also issued the "Announcement on the Cancellation of Export Tax Rebates for Certain Steel Products." , Canceled export tax rebates for most steel products. The aforementioned adjustment measures are conducive to expanding the import of steel resources and restricting the export of primary steel products and general steel products. The impact of the implementation of the policy on the market will gradually become apparent.
