Welcome to the company ! we have many years of professional experience !
systeelplate@outlook.com +86 13526880645

How long can the high steel price be supported?

Time: 2021-03-05 Views: 0

As the Spring Festival is approaching, a new round of cold waves hits, construction sites in the north are greatly affected, steel transactions continue to shrink, inventories continue to rise, the off-season effect gradually deepens, coupled with the impact of the Hebei epidemic black swan, how long can the high steel prices support?

Wang Guoqing, director of the Lange Steel Economic Research Center, said that the market is currently in the off-season in demand. Coupled with the epidemic control, many construction sites in the north have been closed early, and the market is weak, showing a volatile adjustment. The possibility of a sharp decline in the short term is unlikely.

Compared with previous years, steel prices are still at a high level. Taking rebar as an example, the monitoring data of the Lange Steel Cloud Business Platform shows that as of January 20, the average price of Grade 3 rebar (Φ25mm) in the top ten major cities across the country was 4,291 yuan/ton, down 3.6% month-on-month and up 498 year-on-year Yuan/ton, an increase of 13.1%, an increase of 6.6% compared with the same period in 2018, and an increase of 27.5% compared with the same period in 2017.

The prices of other steel products are relatively similar. Compared with the same period of last year, the price is basically 400-1000 yuan/ton, and the price is at a relatively high level. Among them, the price of hot-rolled coil is 4502 yuan/ton, which is still in the past 9 years. The high position.

High prices mean high risks, and steel traders are less willing to store in winter. This year's off-season has been postponed for about half a month. At this time in previous years, the demand in the off-season in winter has fallen, and prices will generally fall. In the coming spring, the demand will rebound and prices will generally rise. Steel traders often use the price difference before and after for winter storage. In 2020, the steel trader's winter storage price is about 3,500 yuan/ton, and this year's price is obviously higher. Compared with the beginning of the year, although the steel price has declined, the overall decline is not large.

How long can the high steel price be supported?

There has been an inflection point in inventory, but compared with previous years, the social inventory of steel is still at a low level. According to the monitoring data of the Lange Steel Cloud Business Platform, as of January 15, the social stock of steel was 8.598 million tons, a year-on-year decrease of 670,000 tons, or 7.8%.

Inventories for the whole year of 2020 are at a high level, basically about 30% higher than the same period in 2019. The inventory in March set a record for many years, reaching 23.127 million tons, an increase of about 47% year-on-year. After October, due to relatively strong demand, Inventory has fallen rapidly. As steel prices are currently at a high level, steel traders are not willing to store in winter, resulting in low social inventories.

In terms of cost, the support for steel prices is still relatively large, and the price of raw materials has seen a large increase recently. As of January 19, the Platts Iron Ore Index was US$170.3/ton, which has been operating at a high level of more than US$170 for nearly 10 consecutive days, an increase of US$74.4/ton year-on-year, an increase of 77.6%, or about 481 yuan. The fourteenth round of increase in coke prices has landed, with a cumulative increase of about 800 yuan/ton. The sharp rise in the price of raw materials has greatly pushed up the cost of steel. The cost of molten iron has risen by nearly 600 yuan/ton, and some steel companies have already suffered losses.

In addition, the Hebei epidemic has lasted for more than 10 days, not only boosting the increase in steel inventory, but also raising the cost of steel to a certain extent. During the epidemic, many cities were closed for traffic control. Many vehicles with license plates in Hebei were persuaded to return. The liquidity of steel in northern areas declined, and many construction sites were closed earlier. Terminal demand decreased. Steel transactions in the Beijing-Tianjin-Hebei region experienced a sharp drop. Coupled with the double interference of the cold wave, some companies in the north have been affected in transportation and loading and unloading. Shipping, railway and automobile freight rates have all increased, which has increased production costs.

On the whole, Wang Guoqing said that the off-season effect is gradually showing, and the market is expected to show a phased weakening before the Spring Festival. Judging from the current situation, because the price of raw materials continues to rise, the cost has increased the support for the market. Steel mills use the increase of ex-factory prices to transfer cost pressures, so there is little room for market decline. In general, the domestic steel market will present a wide-ranging turbulence pattern in 2021, the midline of steel prices will move upward, and the room for upside will expand.

Related news

More >>

Hegang Wugang's ultra-large thickness and ultra-large single-weight chromium-molybdenum steel orders were successfully delivered to customer.

3.3 million tons/year diesel hydrogenation plant project of Wugang for Guangdong Petrochemical, a Sino-Venezuel joint venture, replacing the imported chromium-molybdenum steel plate with a thickness of 172 mm and a weight of 49.58 tons delivered to the customer. The thickness and unit weight all became the top of same steel plate .The most important thing is to boost the petrochemical industry to realize the localization of steel for construction of this type project. In the early stage process...

The epidemic situation is superimposed in the off-season.

Hebei's new crown epidemic is still continuing. As of January 15, Hebei reported 90 new confirmed cases, with a total of 941 confirmed cases. Most industries in the Beijing-Tianjin-Hebei region were affected, especially the steel industry. Affected by this, the three cities in Hebei were closed, road transportation was blocked, some places were closed early, construction sites were suspended, and now it is in the traditional off-season, steel traders' shipments are greatly reduced, and many oth...

Xingcheng Special Steel's large blast furnace won the title of "Winning Furnace" in the country again

On July 1, the results of the "National Key Large-scale Energy-consuming Steel Production Equipment Energy Saving and Consumption Reduction Benchmarking Competition" in 2018 were released. Xingcheng Special Steel's 3200 cubic meter blast furnace was in the evaluation of 3000 cubic meters (inclusive) to 4000 cubic meters , Won the honorary title of National "Excellent Furnace". This is the fourth consecutive year that Xingcheng Special Steel's large blast furnace has won the honor since participa...

High inventories in the steel industry have not changed

Affected by the epidemic, the steel industry, growing rapidly for three consecutive years, has fallen into a trough, encountering a series of problems such as blocked exports, declining demand, high inventory, and falling prices. He Wenbo, Secretary of the Party Committee of the China Iron and Steel Association, said recently that the epidemic has had a greater impact on steel demand. Judging from the indicators of the main steel industry in the first quarter released by the Statistics Bureau, ...


Customer satisfaction is our first goal!


+86 13526880645




No.186, Zi Dong Road, Guan Cheng District, Zheng Zhou, He Nan Province.

Inquiry Email

Business cooperation

+86 13526880645

Company address

No.186, Zi Dong Road, Guan Cheng District, Zheng Zhou, He Nan Province.