Steel prices rose last week and fell in the second half of the week, mainly affected by events in Ukraine.

Steel prices rose last week and fell in the second half of the week, mainly affected by events in Ukraine. From the perspective of the recent market, there is a high probability that the domestic steel price will continue to strengthen after the short-term adjustment: first, the recent centralized construction of major projects around the country, and the total investment of centralized construction projects has increased by more than 45% compared with that from January to February last year. With the warmer weather, the construction of construction projects will be gradually started, and the actual demand for downstream projects is expected to grow rapidly; Second, the current steel inventory is lower than that of the same period of last year, and the inventory accumulation rate this week is slightly higher than that of the same period of last year. According to the current data, it is estimated that the peak value of steel inventory this year will be about 28 million tons, down 15% from the peak value of last year; Third, the cost of electric furnace steel is high. At present, it is in the stage of increasing demand for scrap steel. In addition, the new scrap value-added tax policy will be implemented from March 1, and the cost of electric furnace steel is facing further upward pressure. It is expected that the domestic steel market price is expected to stabilize and recover this week. Focus on the start-up of downstream demand, inventory changes and the resumption progress of steel plant. Immediately bid farewell to February and enter March. The market is still in shock operation. This operation mode is not a bad thing before the demand is fully released. In March, the interference of external factors in the market still exists, but it can be accurately expected that the market will gradually determine its trend by its own supply-demand relationship. This year’s market is a slow heating market, which is getting better and better month on month. The money has been released from January to February, and the policies of all localities from January to February have begun to work. The newly started key projects have increased by 45% over the same period last year, and the rest is up to time. The weak year-on-year data is due to the decline of real estate factors, but it also gets better month on month. According to a survey conducted by an organization on the resumption of blast furnace work in March, the daily average pig iron in March was 180000 tons less than that of last year. In addition, the recent steel price was unfavorable to the recovery of electric furnace output and the addition of scrap steel in converter, which also inhibited the increase of steel output, so that the supply will not rise sharply in March. From the perspective of output in the first quarter, the output decreased by more than 10% year-on-year from January to February and about 6% in March. Even if the real estate demand decreased by about 20% in the first quarter, the total steel demand decreased by only 5-6%. In the first quarter, the relationship between steel supply and demand was tightly balanced, which was also the reason for the sharp decline in social inventory. A steel and iron website estimated that the peak of total steel inventory this year was about 15% lower than that of last year. The market with shock operation is suitable for steady operation, and experts can buy low and sell high. We are full of confidence in China’s economy!

Post time: Mar-01-2022