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It is reported that on December 24th, Baosteel, China's leading steel company, issued the latest price policy - raising the price of products in February next year, cold-rolled by 300 yuan / ton, an increase of more than 8%, hot-rolled steel coil raised 100 yuan -200 yuan / ton, an increase of about 6%. Prior to this, Shougang and Shagang also increased product prices.
However, in the context of the broader market decline, Baosteel's stock price is still falling, yesterday, Baosteel's stock price fell 2.22% to 4.85 yuan; another major steel producer, Wuhan Iron and Steel shares fell more than the price, reaching 3.74% to 5.15 yuan.
On December 23, the business forecast issued by the Department of Market Operations of the Ministry of Commerce stated that according to monitoring, in the first half of December, the average domestic steel price was 4,117 yuan/ton, which was 0.1% lower than the second half of November. The trend has stabilized obviously. Variety prices of various varieties rise and fall, which 1mm cold rolled ordinary sheet, φ25mm rebar rose 1.9% and 0.7%; 4 # I-beam, 8 # channel steel fell 1.3% and 0.6%.
The sharp reduction in output of iron and steel companies and the decline in market supply are also important factors in maintaining steel prices. According to statistics, in November, the country’s crude steel production was 35.189 million tons, which was 2% lower than in October and 12.4% lower than the same period of last year. Driven by the country’s continuous introduction of the policy of expanding domestic demand, market confidence has recovered, transactions have improved, and the price of steel products in some regions has increased. Among them, the Fujian and Hunan regions rose by 3.2% and 2.1% respectively. In addition, the price of raw materials for iron ore and other steelmaking materials has stabilized, which also supports the steel market.
In contrast with the stabilization of the steel products, the iron ore market has recently begun to pick up.
A few days ago, there were statistics showing that domestic iron ore stockpiles in the Port of Hong Kong have dropped significantly, and domestic iron and steel companies have “actively pulled goodsâ€. It is understood that most steel companies in Hebei Province, the country’s largest steel production base, have begun to resume production.
Then, the acceleration of iron ore stockpiles has been reduced. The price increases of Baosteel and other steel companies mean that the winter is over.
“Actually, these prices raised by these companies in Baosteel are indicators of rising confidence in domestic steel demand.†He Rongliang, an analyst at the China Circulation Productivity Promotion Center, said that according to the disclosure, the price of steel fell sharply in the second half of the year. In the third quarter, Baosteel's steel stocks reached 52.1 billion yuan. If calculated in accordance with this scale, Baosteel's stocks will have less than a few billion yuan. Now that domestic demand has picked up slightly, it is reasonable to adjust its prices. However, from a deeper perspective, the increase in steel prices is also a test for the development of market demand.
“In the economic crisis, the price adjustment of the means of production has reached its mid-term, and the sharp drop in price has already ended.†According to He Rongliang, there are still many uncertainties affecting domestic steel prices. Not long ago, some analysts said that the greater crisis that will occur in the United States is the credit card crisis. The US Dow may fall to 4000 points next year. The US economic system will continue to have new problems, indicating that the current financial crisis has not only not yet reached its bottom. And the impact on the real economy is further deepening, and its impact will be further manifested. The development of China’s economy has long relied on exports. Now it is a transition period, and the iron and steel industry must rely primarily on domestic demand.
He Rongliang said that on the whole, the current downstream industrial production is still sluggish. In November, the national output of internal combustion engines and automobiles decreased by 45.5% and 15.9% compared with the same period of last year. Therefore, due to the weak demand, domestic steel prices will remain weak.
After experiencing a long period of price fall, Chinese steel companies finally got new opportunities for gasping.