The probability of steel price falling is greater than rising in the next 1-2 months
On April 16, the "Lange Steel Network 2021 Ningxia Steel Market Summit Forum" was held in Yinchuan, Ningxia. Ma Li, the chief analyst of Lange Steel Network, deeply analyzed the trend of the steel market in the first half of 2021. He said that in the short term, the steel price may have a correction, and the operation is mainly based on risk prevention.
Ma Ma first reviewed the recent steel price trend, then analyzed the domestic and foreign steel market environment, supply, demand, raw and fuel prices and profits, and predicted the future steel price trend.
Ma Ma said that domestic steel prices generally rose after the Spring Festival; On April 16, the average price of Lange Steel deformed steel bars was 5071 yuan, up 750 yuan or 17.5% from before the holiday; The average price of hot rolled coil was 5561 yuan, up 1050 yuan or 23.2% compared with that before the holiday; Tangshan billet price reached 4960 yuan, 1110 yuan higher than before the Spring Festival, or more than 29%
In terms of monetary policy, Ma Li believes that the international monetary policy will continue to be loose, especially from the recent statements of senior executives at all levels in the United States, the ultra-loose monetary policy of the United States will remain in the next two years. At home, the Central Economic Working Conference made it clear that the macroeconomic policy in 2021 should maintain continuity, stability and sustainability, and stressed that there should be no sharp changes in policy operation. The formulation of "no sharp turn" not only emphasizes "no sharp turn", but also clarifies "turn". From the data of broad money and new social finance in the first quarter, it has dropped from the peak of last year, but the overall money supply is still very sufficient, and the domestic monetary policy will remain loose in the short term.
Ma Ma said that at present, the domestic steel production remains high and the supply pressure is high, but the pressure will gradually decrease in the later stage. This is mainly due to the strict implementation of Tangshan's environmental protection production limit and the Ministry of Industry and Information Technology's policy of reducing the annual crude steel production this year, which will restrain the steel production. At the same time, this year's domestic economic growth target will reach more than 6%, which will lead to an increase in steel demand. With this decrease and increase, there is likely to be a shortage of domestic steel this year.
In terms of inventory, Ma Ma said that the overall steel inventory this year is at a high level in the past five years, and the steel factory inventory pressure is relatively high, but the overall steel inventory this year has declined rapidly. In addition, the current inventory structure has also changed. Before the festival, under the influence of high prices, retail investors do less winter storage. After the festival, most of the inventory resources are in the hands of steel mills and steel mill agreement holders, which is conducive to the stability of the market. But now some retail investors have established inventories, which are gradually dispersed, which will be unfavorable to the market trend.
Ma Ma said that at present, the demand side of construction steel is not warm, but the overall operation is healthy, and the output of domestic industrial products has maintained a rapid growth. In January-February of this year, the output of major industrial products in the country increased significantly compared with that of last year, with a 300% increase in containers. The overall new order index of the manufacturing industry was 53.6%, 2.1 percentage points higher than that of February, and the overall situation was good.
Ma Ma believes that in the short term, the cost of steel raw materials and fuel will be in a state of high fall, and the cost support will be weakened. The core focus of iron ore prices is on China-Australia relations and the implementation of the Ministry of Industry and Information Technology's policy of reducing crude steel production. In addition, with the decline of raw fuel prices, steel mills' profits continued to rise, and the support of costs for the current high prices was significantly weakened.
In view of the above, there are three main positive factors in the current steel market: the continuation of international and domestic monetary easing policies; The strong demand for steel, especially industrial steel, continues; Various policies affect the release of steel production capacity. There are also three negative factors. First, the relatively high inventory; The second is the relatively high absolute price; Finally, the high price of raw materials and fuels fell back, the profits of steel mills increased, and the cost support weakened.
Ma Ma believes that in the medium and long term, under the relatively strong demand at home and abroad, the restrained supply capacity and high cost support will keep the overall steel price at a high level. In the short term, under the background of rapid economic growth, the probability of price decline in the next 1-2 months is greater than the probability of price rise due to the expectation of monetary policy tightening again, high prices, high profits and the gradual ebb of demand concentration release. However, after the relatively obvious price adjustment, we can actively build a database.
