As of 25, December, after the first rebound in steel prices, steel composite price index fell by 0.21%. In a variety of species, the long material price index fell by 2.66%, flat material price index rose 2.88%. Iron ore prices fell after the first rebound, iron ore comprehensive price index fell 8.56% month chain, import ore price index fell by 6.50%, domestic ore price index fell by 11.56%, in line with expectations. The steel market outlook January, long and short intertwined, shock run.
Domestic macroeconomic pressure, steel prices continued to rise in confidence. In the middle of December, the six major power plant electricity consumption grew -11.6%, compared with the beginning of the expansion of the -3.8% decline. December electricity consumption of coal chain growth rate fell to 1.1%, a record 09 years since the same period a new low. Local state-owned enterprises profit fell in April, a decline gradually increased. 1-11 month local state-owned enterprise profits fell 7.3% (1-10 month fell 6%, 1-9 months fell 2.7%, 1-8 months fell 1%). Overall, the real economy is still relatively weak, the situation continues to deteriorate, the economy has not yet bottomed out signs, steel prices continued to rise in confidence.
Weak balance of supply and demand will curb steel prices continue to rise. Since December, steel prices rise, partly thanks to the previous price continued to fall after the production; on the other hand is improved demand, we conducted a survey in December third weeks of daily turnover reached 140 thousand tons, an average increase of 20 thousand tons. Demand for the improvement is mainly manifested in the following aspects: one is the automobile industry sales booming with steel demand growth. November car sales of 2 million 508 thousand and 800, of which 219 thousand and 700 passenger cars, car and passenger car prices were 19.99%, 23.74%, the growth rate rose sharply. Two is “ double 11” reduce the home appliance inventory, November industrial online air conditioning manufacturers library sales ratio of 1.44, down from October, less than the same period the average. Three is the downstream industry continued to reduce raw materials inventory, in the demand for improvement and prices continued to fall after the price is no longer fall to worry about the price of the library. The four part is the project area. Five is better than expected exports. By January, the building materials demand will drop slightly, the transaction data in the fourth week of December has shown, while the sheet enterprises will not continue to increase the inventory of raw materials, the demand is also difficult to sustain growth, especially the shortage of supply in the market, gradually added resources, so the supply and demand relationship weakening is the probability of the event, in addition to the individual regional market Buzhang, who in December rose fast and large range of varieties, such as cold and hot, some market prices may even appear callback.
Supply is expected to continue to decline in favor of reducing market pressure. Survey data show that as of December 25th, even if steel prices rise, the 163 steel blast furnace capacity utilization fell to 80.6%, the lowest level since the survey data, 72 Tangshan steel blast furnace operating rate dropped to 83.17%, if you do not consider the November 2014 APEC meeting production, so also set with low level data since March 28, 2014 (when is this level). Such output levels, respectively, compared with the same period last year by 14.78 percentage points and 9.85 percentage points. And Hebei 72 steel mills 2.74% and 163 of the country's 4.91% of the profit side, it is difficult to support the steel mills to maintain the current level of construction, new production, maintenance of the enterprise is still emerging. So, while demand is weakening, but the supply is expected to continue to fall in January, the price of steel is relatively light, even if the callback or fall, the magnitude is limited.
Low inventory of steel prices have some support. As of December 10th, China Steel Association statistics, steel stocks 14 million 340 thousand and 400 tons, for the second year since the low level (the lowest is 13 million 637 thousand tons in January 10th). According to my steel statistics, a sample of steel mills in December third weeks and fourth weeks of inventory continued to decline, the inventory of steel mills may still continue to reduce the pressure. Even if January has increased, the relative pressure is smaller than the same period last year. Social stock is down to 8 million 779 thousand and 700 tons of historical low level, even if the increase in the follow-up, the market pressure is not large, and once the decline, there may be a rebound in prices.
Raw material prices due to falling demand pressure. As steel production in January may continue to decline and lower than the same period in history, so the demand for raw materials has also followed a decline, so the price pressure, steel costs are expected to continue to decline.
The futures market, iron ore, steel 1601 contracts continue to face a squeeze of the virtual disk situation changes, while the 1605 iron ore contract, subject to short-term fundamentals deteriorate, there is still pressure, while the 1605 contract thread, can do more dips (inventory).
In January, the steel market in the macro economy and the impact of continued pressure on demand season, some large increases, the rapid rise of the regional varieties prices are still slightly down, but some of the seasonal demand for small areas, some varieties do not exclude zhangdiehuxian.