Steel Price Forecast: Changes in Steel Prices?

1. The factors affecting the steel market include the following 

• In November, China exported 5.46 million tons of sheet metal, a year-on-year increase of 68.2%

The latest data shows that in November 2023, China exported 5.46 million tons of steel plates, a year-on-year increase of 68.2%; From January to November, the cumulative export volume was 54.46 million tons, a year-on-year increase of 39.2%.

• The total consumption of steel in China has reached its peak and the decline is an inevitable trend

According to experts from the China Iron and Steel Industry Association, the current total consumption of steel has reached its peak, and a decrease in total consumption is an inevitable trend. Although the demand for steel in real estate has decreased, the demand for steel in industries such as automobiles, shipbuilding, and home appliances has increased, making up for the shortage of total demand. The steel market still has strong resilience.

• China’s coal supply maintained a relatively high level in the first 11 months of this year

At present, China’s macroeconomic situation is showing a recovery trend, with domestic heating coal consumption entering the peak season and coal demand growing rapidly. In November, 410 million tons of raw coal were produced, a year-on-year increase of 4.6%. In the short term, domestic coal supply is relatively sufficient, and the overall market supply and demand are balanced.

2. In terms of spot market 

Today’s rebar: stable, moderate, and weak

Market expectations have fallen, and short-term rebar prices are following the cost side and market trends. Considering that coke prices are unlikely to fall in the near future, and steel mills have a demand for replenishment in winter storage, it is expected that rebar will steadily rise and operate tomorrow.

Today’s hot roll: weak operation

Recently, there has been more snowfall, transportation has been restricted, and the market has gradually entered the off-season. Demand has not performed well, and supply and demand have shown a double weak trend. However, the profit of compressed steel mills on the raw material side is strongly supported at the bottom, and it is expected that the hot coil will slightly increase tomorrow.

Today’s Mid Board: Weak oscillation

The terminal demand for exports remains resilient, the pace of inventory depletion continues, and the off-season has not yet begun to accumulate inventory. The supply-demand contradiction is not prominent. In addition, steel mills have gradually started winter storage to replenish raw material inventory, supporting the lower space on the cost side. It is expected that the medium plate will operate steadily, moderately and slightly stronger tomorrow.

Today’s strip steel: Broad decline

The market price of hot-rolled strip steel has been weakly adjusted, and overall transactions have been poor. However, with the support of the raw material side, the market’s downward adjustment space may be relatively limited in the new round of upward momentum launched by coke companies. It is expected that the strip steel will operate steadily with individual gains tomorrow.

Today’s profile: Main stability and individual decline

The continuous decline in steel billet prices has weakened the support for the bottom of section steel prices. Currently, the overall market is showing an oversupply situation, and there is insufficient power for short-term price self-regulation. The main trend is to follow the market trend, and it is expected that the profile will continue to rise steadily tomorrow.

Today’s pipe materials: slightly reduced

After the fourth round of increase in coke prices, steel mills may experience further losses, and there are expectations of reduced production in the future. In addition, currently supported by high costs, the reduction in spot prices is not significant, and it is expected that pipes will stabilize and experience individual declines tomorrow.

3. In terms of raw material market

Today’s steel billet: temporarily stable operation

From the current market situation, downstream steel rolling enterprises face significant inventory pressure in their factories, coupled with entering the off-season of demand, resulting in a decrease in trading activity. However, considering the losses suffered by steel companies and their strong willingness to raise prices, it is expected that the steel billets will run strong tomorrow.

Today’s iron ore: weak volatility

Against the backdrop of steel plant maintenance, there is still an expectation of a decline in molten iron production, and macroeconomic optimism has weakened compared to the previous period. The market sentiment is bearish, and the relatively favorable situation is still supported by low inventory. It is expected that ore prices will rise under pressure tomorrow.

Today’s coke: stable, moderate, and slightly strong

Recently, the arrival of steel mills has been hindered, and coupled with the low level of coke in the factory, there is a good enthusiasm for coke procurement. However, in the off-season market, the increase in steel plant maintenance has created a negative impact on the raw material end, and the upward space is relatively limited. It is expected that coke will operate in a narrow range and become stronger tomorrow.

Today’s scrap steel: slightly weakened

The current iron ore price is at a high level, coupled with the fourth round of coke price increase, the fundamentals of scrap steel are good. But as policies enter a vacuum period, the trading focus of the finished product market shifts to the industrial reality level. The short-term rise in scrap steel may be suppressed by finished products, and it is expected that scrap steel will slightly rise tomorrow.

Today’s pig iron: main stability and individual adjustment

The black series continues to weaken today, and the bullish sentiment in the market has cooled down, with stable quotes from various pig iron enterprises. At present, downstream demand for pig iron is still limited, but considering the support of raw material costs, there is not much driving force for further decline. It is expected that pig iron will fluctuate and adjust tomorrow.

4. Comprehensive perspective

The current decline in the market is mainly due to the pessimistic market sentiment, which has led to relative pressure on the short-term market. However, from the perspective of the magnitude of the decline in the finished product market, the pressure resistance is still strong. In addition, with the cooling in many parts of the country, the demand for coal in the market has increased. Therefore, from the perspective of raw materials, the current trend of strong finished products has not changed. It is expected that steel prices will stabilize and rise slightly today, with a range of 10-30 yuan.