Iron ore plummeted by 8%, rebar and hot coil could not hold up, and the price of steel in September was set for gold?

On September 1, iron ore futures prices plunged nearly 8% to close at 763 yuan/ton. Steel futures prices continued to fall by 2%, rebar fell to 5242 points and hot rolls fell to 5492 points. The price fluctuated at a low level throughout the day, always running around the upper and lower boxes of 5200 yuan and 5400 yuan, temporarily falling below the 60-day moving average. Coking coal and coke tenaciously closed up, recovering the 2500 yuan and 3100 yuan mark respectively.

On the 1st, the domestic steel market price was stable and weak, and the price of square billet in Tangshan area fell by 20 yuan/ton to 5000 yuan/ton. What production restrictions and shutdowns do not work, steel prices continue to weaken, steel continued to fall sharply. On the first day of Jin Jiu, the major steel mills were still strong and strong. In the morning, futures fluctuated widely, in stock generally fell, end customers waited and watched, and in stock traders cut prices to ship. In the afternoon, futures fluctuated and closed green, with in stock mainly stable. End customers mostly purchased low-cost resources on demand. in stock traders sold at a favorable price. Some real orders could be negotiated. Market transactions improved significantly.

On September 1, domestic construction steel prices were stable and weak; Hangzhou Zhongtian reported 5180 yuan/ton, down 40 yuan/ton; Beijing Hegang reported 5090 yuan/ton, down 30 yuan/ton; Guangzhou Guanggang reported 5450 yuan/Ton, down 20 yuan/ton. Domestic hot-rolled coil prices fell by 10-50 yuan/ton; Shanghai Bengang reported 5680 yuan/ton, down 20 yuan/ton; Tangshan Anfeng reported 5680 yuan/ton, down 40 yuan/ton; Foshan Liugang reported 5570 yuan/ton, down 10 yuan/ton. Domestic medium-thick plate prices are stable and weak; Among them, Jiangyin Hengrun reported 5560 yuan/ton, stable. Domestic cold-rolled plate roll prices are stable and weak, of which Shanghai Bengang reported 6390 yuan/ton, stable.

According to Lange Steel monitoring data, the average price of 25mm grade III rebar in Ф in key cities in China is 5218 yuan/ton, down from 19 yuan. The average price of 6.5mm high-speed Ф in key cities in China was 5761 yuan, down from 15 yuan. The average price of 5.5mm hot rolled coil in key cities in China was 5679 yuan, down from 29 yuan. The average price of 1.0mm cold plate in key central cities in China was 6477 yuan, down from 21 yuan; the average price of 20mm medium plate in key cities in China is 5629 yuan, down from 9 yuan.

On the news side, China's August manufacturing PMI 50.1, expected to 50.2, the previous value of 50.4. China's August non manufacturing PMI was 47.5, the previous value of 53.3. Analysts generally believe that with the gradual fading of the impact of the epidemic, coupled with the September start of the peak season and the arrival of the "double festival" consumption season, manufacturing and services PMI or soon ushered in a rebound. Future policies need to increase efforts to expand domestic demand and consolidate the foundation of economic recovery.

The State Council decided to launch the eighth major inspection. After careful preparation, 16 inspection teams set off on August 31 to Beijing and other 16 provinces (autonomous regions and municipalities) to carry out on-site inspection work for about 10 days. At present, nine steel mills (7 in Liaoning, 1 in Jilin and 1 in Heilongjiang) have said that they have received notice from relevant departments that "the output of crude steel this year is not higher than that of last year". According to the investigation, the sample steel mills that received the notice of production restriction expect a total of 3.08 million tons of steel to be overhauled and reduced from September to December, while the sample steel mills that have not received the notice of production restriction affect 165000 tons of steel. Up to now, the total impact is expected to be about 3.245 million tons.

At present, the work of reducing crude steel production is still advancing. With the arrival of the traditional peak demand season, the supply-side reduction has further shown its role in promoting prices. Only from the economic data released in July before, the actual demand for steel downstream remains to be seen.

Recently, the steel market is in a weak pattern of supply and demand, the production of thread of the material slightly rebounded month-on-month, hot roll production continued to decline. Steel demand rose month-on-month, but remained at an all-time low year-on-year. Steel stocks continue to decline, but the speed of going to the warehouse is not high. Steel demand is expected to increase in the short term, but the overall demand in the medium and long term is weak, domestic steel prices will be adjusted shock.

Source: Intercontinental Foundry

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