Demand and cost push up steel prices

The price of rebar in winter ushered in a strong rise. There are two reasons for the performance exceeding expectations:

The first is the seasonal rush for real estate's tough stacked processing areas. The terminal demand for rebar has recovered more than expected after the National Day, and the weekly apparent demand continues to set a new high point over the same period. The highest rise to 4,647,700 tons, an increase of 20.10% year-on-year, while the total demand for rebar in November increased 11.27% year-on-year . In addition, the average transaction volume of construction steel for major national traders increased significantly year-on-year. The average daily transactions in October and November were 244,100 tons and 221,300 tons, an increase of 17.98% and 6.28% respectively.

The second is the strong support for the cost of coke and iron ore. The removal of 4.3m coke ovens in Shanxi and other places caused a mismatch between coke supply and demand. In October, the price of coke started to rise strongly, and the spot price has increased for 8 rounds. After entering November, the rise in finished products improved the profits of steel mills, and the demand for iron ore returned to a high level. During the same period, the domestic iron ore arrivals decreased. The supply and demand pattern of iron ore continued to rise in the price of coke in just one month. Up nearly 20%.

Supply pressure will gradually emerge

Rebar demand has weakened in the off-season, but supply has remained high. According to data from the Steel union  , the latest weekly production of rebar was 3.5545 million tons, which was maintained at around 3.6 million tons in the past two months. Although the profit of rebar has shrunk recently, it has not caused large-scale losses in steel mills. Among the 247 sample steel mills, the profitable steel mills accounted for 92.21%. Among the 62 construction steel independent electric arc furnace steel mills, only 8.06% lost money. The subsequent steel mills are more enthusiastic about production, and the output is expected to remain high.

In addition, the decline in rebar inventories has narrowed after the demand weakened in the off-season. The latest total inventory is 6.408 million tons, which is higher than the same period last year. The factory inventory has begun to increase. It is expected that the inventory turning point will soon appear. price.