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Steel spot, the decline of rebar and high-line narrowed, and the prices in most cities remained stable, and a few cities affected by the epidemic fell between 10 and 50 yuan/ton. Except for the price quotes of third-level rebar in Beijing, Tianjin, Tangshan and other cities, the price quotes of third-level rebar in other cities are above 4,000 yuan.
Compared with the weak trend of construction steel, the trend of industrial steel is relatively strong. The prices of hot-rolled plate coils and cold-rolled plate coils rebounded slightly, but the increase was limited. The increase in cities such as Shanghai, Wuhan, and Nanjing was between 10 and 30 yuan/ton, and the prices in most cities remained stable compared with yesterday.
In terms of market transactions, downstream steel companies purchase on demand, and steel traders mainly shipped, and the market panic has improved slightly. Some cities have been affected by the epidemic, and steel market transactions have basically stagnated and demand has dropped significantly.
This morning, National Bureau of Statistics released the China Purchasing Managers Index for August (PMI). The manufacturing Purchasing Managers Index in August was 49.4%, up 0.4 percentage points from the previous month; the non-manufacturing business activity index and the comprehensive PMI output index were 52.6% and 51.7%, down 1.2 and 0.8 percentage points from the previous month, and continued to be in the expansion range.
The domestic economy is still in a contraction range, which is expected. But it is worth noting that the production index was 49.8%, the same as last month, and the new order index was 49.2%, 0.7 percentage points higher than last month. Both indexes continued to be in the contraction range, indicating that the recovery of manufacturing production demand still needs to be strengthened, but the shrinking degree of market demand is more serious than supply.
At present, the oversupply of the domestic steel industry and the steel market is becoming increasingly serious. Even in the off-season, the blast furnace operating rate remains high. The competition between steel mills is very fierce, and no one is willing to stop production, because stopping production means losing the market.
According to estimates, as of August 30, the steel mill's rebar production cost was 3,988 yuan/ton, the hot-rolled plate coil production cost was 4,031 yuan/ton, the cold-rolled plate coil production cost was 4,473 yuan/ton, and the medium-thick plate production cost was 4,208 yuan/ton. The gross profit of the ton of steel is 42 yuan/ton of rebar, the hot-rolled plate coil is -131 yuan/ton, the cold-rolled plate coil is -123 yuan/ton, and the medium-thick plate is -98 yuan/ton.
Something unexpected happened. Although steel mill production is in a loss or a small profit state, it is expected that the steel mill blast furnace iron and water production in will reach 2.34 million tons/day in September, an average daily increase of 86,000 tons/day from August. That is to say, the steel market will increase the supply by about 2.58 million tons in September.
Steel futures and spot prices fell sharply for two consecutive days, someone asked us, what exactly happened in the steel market? Why does it fall sharply when the peak season comes?
In fact, the reason for the sharp drop in steel prices is very simple. First, the supply of the steel market will increase instead of decreasing in September; second, the steel market cannot find a reason for the increase in demand in September.
