Industry News

Steel prices will continue to fluctuate and rise in March

In February, under the interweaving of favorable macro policies and fundamental realities, the steel market prices were low before and then high. At the beginning of the month, steel prices were still in the stage of relying on strong expectations to push up, and the downstream consumption of steel products was not optimistic. In addition, due to the rainy and snowy weather around the Lantern Festival, the actual terminal resumption speed was slower than expected. In the middle of the month, downstream demand gradually improved, market sentiment gradually eased, and the center of gravity of steel prices continued to move upward. At the end of the month, as the price accelerated upwards, fear of heights gradually appeared in the downstream, the mentality of the steel market returned to rationality, and the sentiment of cautiously looking at the market was strong.

From January to February, the housing construction area of real estate development enterprises was 7,844.59 million square meters, a year-on-year increase of 1.8%, of which, the residential construction area was 5,535.14 million square meters, an increase of 2.0%; the newly started housing area was 149.67 million square meters, a decrease of 12.2%, of which, The area of newly started residential buildings was 108.36 million square meters, a decrease of 14.9%; the area of completed housing was 122 million square meters, a decrease of 9.8%. Among them, the area of completed residential buildings was 89.15 million square meters, a decrease of 9.6%.

On March 1, the website of the National Bureau of Statistics announced that in February, the Manufacturing Purchasing Managers Index (PMI) was 52.6%, an increase of 2.5 percentage points from the previous month, which was higher than the critical point, and the level of manufacturing prosperity continued to rise. The 52.6% PMI data is the highest since May 2012.

In February, the effects of policies and measures to stabilize the economy further emerged, combined with favorable factors such as the fading impact of the epidemic, the resumption of work and production of enterprises, the resumption of business and the resumption of the market accelerated, and the level of my country's economic prosperity continued to pick up.

According to SunSirs price monitoring, as of February 27, the average market price of hot-rolled coils was 4,344 yuan/ton, an increase of 2.35% from the beginning of the month; the average market price of cold-rolled sheets was 4,766.67 yuan/ton, an increase of 2.58% from the beginning of the month; The average price of the coil market is 5130 yuan/ton, up 2.81% from the beginning of the month; the average price of the color coating market is 7566.67 yuan/ton, up 0.44% from the beginning of the month;

The steel market fluctuated and rose in February, mainly due to:

The steady growth measures of favorable macro policies have been continuously implemented, which has played a certain role in boosting the steel market. In January, new loans for infrastructure construction were 1.5 trillion yuan; at the end of January, the M2 balance increased by 12.6% year-on-year, and the growth rates were 0.8 and 2.8 percentage points higher than the end of the previous month and the same period of the previous year, respectively. Both showed strong growth, indicating that the overall tone of monetary easing has not changed.

Demand is improving. After the price of steel rose in February, the resumption of work and production is also accelerating, and the resumption rate of engineering projects across the country is nearly 90%. Investment in infrastructure and water conservancy is expected to accelerate, and the real estate industry has also sent positive signals. Under strong expectations, it is expected that the recovery of market demand in March is clear, but the real demand of the market has yet to be verified. The industry generally believes that there will be a relatively large increase in demand in March.

Cost support is acceptable. The coke market maintained a stable operation in February. A few days ago, a coal mine accident in Inner Mongolia triggered a large-scale safety inspection, which led to a rise in coking coal prices. Some coke companies plan to start the first round of price increases. In February, the price of iron ore fluctuated upward, and DCE adjusted the trading limit of iron ore, which had a certain impact on the mentality of the iron ore market. At present, the ore price will face the pressure of the thousand yuan mark, and it is expected to adjust and run at a high level in the short term. Focus on whether demand from steel mills can meet expectations. In February, the overall steel scrap fluctuated and strengthened slightly, the market transaction volume increased, and the overall supply of steel scrap resources was still tight. It is expected that short-term iron ore and bifocal prices will remain high and form cost support.

Future market forecast

Due to the acceleration of resumption of work and production and the macro warming market signal, steel prices rebounded and rose in February, superimposed iron ore prices were relatively strong, coke was mainly consolidated, scrap steel resources were tight, and market demand confidence also increased significantly. It is expected that steel prices will continue to fluctuate and rise in March.

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