Destocking Startup Expert Forecasts Steel Price Innovation Low

In the first half of the year, the prices of domestic steel products first plunged and then fell sharply: from early February to mid-April, the shocks rose; in mid-April, real estate control policies came out, quickly fell back and drastically changed, “throwing away a thousand dollars”; starting in late July The technical rebound has risen by around 300 yuan; however, the rebound has shown weakness after 3 weeks, and it has rapidly declined again in recent days. For such a complicated market, many steel companies and related companies have fallen into a state of desperation and impoverishment. There are many factors that affect the price of steel as a commodity. This article analyzes its future trends in terms of inventory, consumption, and production capacity.

Moderator: Inventory is the most direct result of the supply and demand game. After the rally in July-August, the iron ore risk was once again raised due to the fact that the demand was hardly material to improve. After the active restocking was turned into passive restocking, the steel market would once again usher in a destocking process.

Chen Zugong: According to my steel statistics, as of the week of August 20, the stock of long products was 7.129 million tons, which fell for nine weeks in a row. The inventory of sheet metal was 7.836 million tons, a record high since April of this year, and the overall social inventory is still close to 15 million. Tons, at a high level. It is expected that the future inventory differentiation will continue. This shows that under the pressure of policy, new construction starts to slow down, while the demand for steel outside buildings has fallen, and the excess effect caused by capacity expansion is emerging. This situation makes it difficult for steel mills to recover profits quickly in the short term. What will come is the difficult and slow climb of steel prices!

Zheng Ge: Taking the improvement of downstream demand expectations as a starting point, steel mills cut production, and actual stocking is a fuse. The steel market rebound started in mid-July. The rebar 1101 contract rose by RMB 350/t in the rising range from July 19 to August 11. However, due to the expected short-term demand does not bring about improvement in real demand, steel mills to increase production to stop the original de-inventory process, the risk of iron ore increased again, after the active restocking to passive fill inventory, the steel market will once again usher in inventory During the process, the decline in steel, iron ore and sea freight will be synchronized and resonant. It is expected that steel prices will continue to fall in the later period, and the rebar 1101 contract is expected to create a new low after hitting a previous low of 4,050 yuan.