The steel market experienced a significant downturn in mid-to-early August, followed by a rebound as…
Five major materials inventories continue to rise, the current market fundamentals of supply and demand gradually emerged, the cost of iron ore bifocal on Friday fell sharply, but the iron ore closing price is still above 840, and the hot metal remains at a high level, there is still support for steel prices, superposition next week macro expectations gradually stronger, next week how steel prices go, look down…
I. Industry news
1. China Steel Association: In late June, the social inventory of 5 major varieties of steel in 21 cities was 10.41 million tons, a decrease of 20,000 tons from the previous month, down 0.2%, and the inventory did not fluctuate much; 200,000 tons less than in late May, down 1.9%; An increase of 3.12 million tons from the beginning of the year, up 42.8%; That is 1.16 million tons more than the same period last year, up 12.5%.
2. In June 2024, the total area of new commercial housing in 10 key cities was 9,227,600 square meters, down 25.3% year on year; The total area of second-hand houses sold (signed) was 7.72331 million square meters, an increase of 14.8%.
3, the U.S. Labor Department released the June non-farm payrolls report. The report showed that the United States added 206,000 jobs, exceeding market expectations of an increase of 190,000, but compared with the previous value fell. The U.S. unemployment rate rose to 4.1% in June, the highest since November 2021. It beat market expectations by 4.0%. Annual wage growth was 3.9 percent, down sharply from 4.1 percent.
From the US non-farm data in June, the US unemployment rate continued to rise, a new high since November 2021, and the market expected the Federal Reserve to cut interest rates in September increased, which is good for commodities. The real estate policy continues to relax, the second-hand housing turnover increases, the market will have expectations for the policy meeting to introduce further policies on real estate, and the macro is slightly warmer.
II. Market review
In terms of futures, the black system shook up this week, rebar closed 3553 yuan up 9, hot coil closed 3759 yuan up 14, iron ore closed 845.5 yuan up 20.5, coke closed 2253.5 yuan up 3.5, coking coal closed 1557 yuan down 16.5.
In terms of spot, the price of the main market varieties in the country has fluctuated and risen, and individual varieties have fallen. The national average price of 20mmHRB400E thread has risen by 30 yuan/ton, and the national average price of 4.75mm hot-rolled coil has risen by 30 yuan/ton, and the national average price of 3.740 yuan/ton has risen by 19 yuan/ton, and the national average price of 14-20mm thick plate has fallen by 2 yuan/ton. 2.5mm*232 strip steel national average price 3699 yuan/ton up 19 yuan.
III. Influencing factors
1. Industrial end
This week, the five major steel varieties supply 8.9792 million tons, down 128,000 tons week on week, down 1.4%; Five varieties of steel weekly consumption of 8.918,400 tons, of which building materials consumption increased by 1.1%, plate consumption decreased by 1.8%.
This week, the total stock of five varieties of steel 17,799,900 tons, an increase of 60,900 tons week on week. Among them, the stock of steel mills was 4.895,200 tons, a decrease of 116,800 tons week on week; Social stocks were 12,904,700 tons, an increase of 177,700 tons week on week.
This Friday, the production of large materials is reduced, the inventory is increased, the characteristics of weak off-season demand are further apparent, many places are heavy rainfall, the downstream operating rate is limited, and the overall special bond issuance speed is slow in the first and second quarters of this year, the fund arrival rate is insufficient, the progress of infrastructure projects is slow, the construction industry as a whole still has a downward trend after the 5.17 real estate New Deal, steel demand is weak, Weak reality has always suppressed the path of rising steel prices.
2. Cost end
① Iron ore: This week, the country’s 45 ports imported iron ore inventory of 149,886,600 tons, an increase of 623,400 tons; The total inventory of iron ore imported by steel mills in China was 92,129,100 tons, an increase of 727,800 tons from the previous month; At present, the daily consumption of imported ore in the sample steel mill is 2,931,900 tons, a decrease of 0.02 tons from the previous month, and the inventory consumption ratio is 31.42, an increase of 0.25 days from the previous month.
In June, due to the impact of overseas end-of-season impulse, the global shipment of iron ore increased significantly, and it is expected that the shipment volume will decline in a pulse after the end of the impulse, which has certain support for the mine price. In addition, although the steel mill molten iron slightly decreased for two weeks in a row, but still maintained a high level, in July blast furnace maintenance, resumption of production is quite similar, it is expected that the output of molten iron will not decline significantly, while the arrival of scrap steel reduced, steel mills have rigid replenishment demand for iron ore, short-term iron ore trend is strong. However, the demand for the industrial side is low, the steel warehouse is difficult, the port reservoir area is difficult to remove, and the iron ore increase is limited.
② Coke:
Coke first round of ups and downs, coke profits have been improved, this week the national 30 independent coke plant average ton coke profit 38 yuan/ton, production enthusiasm is better, coke inventory in the black system is the most healthy, the current hot metal production is still high, steel plant stock is low, there is a certain demand for coke, coke companies to maintain smooth shipments, there is a second round of willingness to increase, Short-term coke prices are running strongly. However, it should be noted that the demand for finished materials is in the seasonal off-season, and the trading volume is poor, which inhibits the room for coke to rise.
③ Coking coal:
This week, the approved capacity utilization rate of 523 coking coal mine samples was 90.0%, down 1.1% from the previous month. The average daily output of raw coal was 2.029 million tons, down 25,000 tons from the previous month, and the stock of raw coal was 3.495 million tons, up 82,000 tons from the previous month. Total coking coal inventory 33.873 million tons, an increase of 316,000 tons from last week; Steel coking coal inventory of 7.438 million tons, a decrease of 51,000 tons from the previous month.
Affected by the Meng5 raw coal benchmark price in the third quarter down 15.77 US dollars from the second quarter news, coking coal fell sharply on Friday, the market sentiment for coking coal prices weakened, but the hot metal is still at a high level, steel mills coking coal inventory decreased slightly, steel mills have replenish demand, short-term coking coal trend is slightly weaker than coke.
3. Policy end
On the macro side, the “small non-agricultural” data of the United States shows that labor employment is cooling, and the expectation of interest rate cut in September is strengthened, which is good for commodities; Domestic macro, the market is still looking forward to the important meeting in July, many places recently announced the third quarter of local government special bond issuance plan, it is expected that the project will start in the third quarter and the second half of the year, to provide support for the third quarter and the second half of the infrastructure investment, capital entry to push up the board, the market still has a short-term impulse energy, domestic and foreign macro overall strong.
4. next week forecast
Five major materials inventory continued to rise, the current market fundamentals of supply and demand gradually emerged, the cost of iron ore double coke fell sharply on Friday, but the iron ore closing price is still above 840, and the hot metal remains at a high level, the steel price is still supported, superposition next week’s macro expectations gradually stronger, in conclusion, it is expected that next week’s steel price is stable and strong.