November steel prices slightly adjusted late low volatility

In November, steel prices in the domestic market were slightly adjusted, showing a steady decline. In the later period, the market gradually entered the demand off-season, steel production will also decline, the market will remain weakly balanced, and steel prices will continue to fluctuate at low levels.

1. Steel prices in the domestic market decreased slightly, and the chain rate also narrowed. At the end of November, the comprehensive price index of the CSPI steel products of the Iron and Steel Institute was 99.33 points, a decrease of 0.01 points from the previous month, a decrease of 0.01%, which was 0.31 percentage point less than the previous month. For the second consecutive month, the decline narrowed; it was down 5.99 points year-on-year, a decrease of 5.69%. The steel price index was below 100 points for two consecutive months.

1. The price of long products rose slightly and sheet prices continued to fall. At the end of November, the CSPI long products index was 102.41 points, an increase of 0.89 points or 0.88% from the previous period, and the sheet index was 97.95 points, a decrease of 0.75 points or 0.75% from the previous quarter. Compared with the same period of last year, the long products index decreased 5.14 points, a decrease of 4.78%; sheet metal index fell 6.66 points, a decrease of 6.37%.

2. The prices of main steel products have risen and decreased. At the end of November, among the eight steel products monitored by the China Iron and Steel Association, the prices of high-line and rebar rebounded slightly, and the prices rose by RMB 16/ton and RMB 74/ton respectively; The prices of heavy plate, hot rolled coil, cold rolled sheet, galvanized sheet and hot rolled seamless steel tube continue to decline, but the decline rate both narrowed from the previous month and fell by 5 yuan/ton, 30 yuan/ton, and 46 yuan/month respectively. Tons, 7 yuan/ton, 14 months/ton and 44 yuan/ton.

3. Steel prices fluctuate downward trend From the situation in each week, steel prices continued to rebound slightly in the first two weeks of November, and fell again in the last two weeks. By the second week of December, the price of steel has dropped for four consecutive weeks, and the decline has been narrowing from week to week.

Second, the domestic market analysis of the factors of steel price changes In November, as the weather turned cold, the steel market gradually entered the demand off-season. Although the production of crude steel also declined, the situation of oversupply did not change significantly, and the price of steel products fluctuates slightly.

1. The growth rate of the main steel industry has declined slightly, and the growth in steel demand has slowed down According to the data from the National Bureau of Statistics, from January to November, the national fixed asset investment (excluding rural households) increased by 19.9% ​​year-on-year, and the growth rate fell from January to October. 0.2 percentage points, 0.8 percentage points lower than the same period of the previous year. In November, the industrial added value above designated size increased by 10.0% year-on-year, 0.1 percentage point lower than the same period of last year and 0.3 percentage points lower than that in October; the electricity consumption for manufacturing industry was 247.6 billion yuan. Kilowatt-hour, an increase of 8.4% year-on-year, 0.7 percentage points lower than in October; China's rail daily average daily volume of shipments was 11.31 million tons, down 0.2% from October; manufacturing PMI was 51.4%, unchanged from the previous month, but the new orders The index continued to decline, falling by 0.2 percentage points month-on-month; the PPI was flat, down 1.4% year-on-year and negative for 21 consecutive months. Looking at the overall situation, although the main steel industry continues to maintain growth, the growth rate has declined and the growth in demand for steel products has also slowed.

2. The output of crude steel has declined, but it is still at a relatively high level. According to the data from the National Bureau of Statistics, the output of pig iron, crude steel and steel (including duplicating wood) was 52.9 million tons, 60.88 million tons and 90.32 million tons respectively in November. , respectively, an increase of 0.6%, 4.2% and 10.0%; daily output of 2,293,300 tons of crude steel, a decrease of 70,100 tons, a decrease of 3.34%. The daily output of crude steel has dropped by two months in a row, which is the lowest level of daily production since the beginning of this year. According to customs statistics, the national export of steel is 5 million tons, which is a decrease of 70,000 tons, a decrease of 1.38%, and the import of steel is 1.25 million tons. 11 million tons, an increase of 9.65%. The imported steel billet was 50,000 tons, an increase of 30,000 tons over the previous month. The total billet output was equivalent to 3.94 million tons of net crude steel exports, a decrease of 260,000 tons compared with the previous month, a decrease of 6.19%. Based on the above data, the average daily supply of crude steel in the domestic market in November was 1.898 million tons, a decrease of 65,900 tons, or 3.36%, compared with the previous period. Although the production of crude steel declined in November, taking into account the demand has also declined, the domestic market supply and demand conflicts have not significantly improved.

3. The price of imported iron ore continues to be high, which has a certain supportive role for steel prices. In November, the prices of raw materials for steel production in the domestic market were mixed, among which: the price of imported iron ore (customs) remained stable, and the chain decreased slightly. USD 0.24/ton, a decrease of 0.19%, which fell for the first time after rising for 3 consecutive months, but it still rose by 16.70% compared with the same period of last year. Scrap prices continued to fall and fell by RMB 18/ton, a decrease of 0.72%. , narrowed by 0.20 percentage points from the previous month; domestic iron concentrates, coking coal and metallurgical coke prices rose by 1.22%, 0.86% and 1.86% respectively.

3. In the international market, the price of steel declined from the end of November. At the end of November, the CRU International Steel Composite Price Index stood at 168.3 points, an increase of 1.7 points or an increase of 1.0% from the previous quarter, and a decrease of 2.5 points from the same period of last year, a decrease of 1.4%.

1. The prices of long products and sheets have increased. The increase in long products has been higher than at the end of sheet 11, the CRU long product price index is 184.6 points, which is a quarter-on-quarter increase of 1.3 points or 1.3%; the sheet price index is 160.9 points, which is 1.4% higher than the previous month. Point, an increase of 0.9%, 0.4 percentage points lower than the increase in long products. Compared with the same period of last year, the long products index fell 3.2 points, a decrease of 1.7%; sheet metal index fell 1.5 points, a decrease of 0.9%.

2. North American steel prices continued to rise. Europe and Asia fell from rising to rising. (1) North American market At the end of November, the CRU North American steel price index was 176.8 points, which was an increase of 4.5 points or 2.6% from the previous quarter. In November, the manufacturing PMI in the United States was 57.3%, which was a 0.9% increase from the previous quarter and was up for the sixth consecutive month. Among them, the new order index reached 63.6%, up 3.0 percentage points month-on-month; at the end of November, the US crude steel capacity utilization rate was 75.6%, a decrease of 0.2 percentage points from the end of last month. This month, prices of hot-rolled coils and cold-rolled coils of steel mills in the Midwestern United States continued to rise, and the prices of other types of steel products rose.

(2) European market At the end of November, the CRU European steel price index was 158.8 points, a year-on-year increase of 1.1 points, or a 0.7% increase. In November, the eurozone manufacturing PMI index rose to 51.6%. Although the fifth consecutive month was higher than 50%, the imbalanced growth trend has deepened. Among the major countries in the euro zone, the manufacturing PMIs of Germany and Italy rose by 1.0 and 0.7 percentage points respectively, but the Spanish manufacturing PMI was 48.6% and fell back below 50%; while France continued to shrink, the manufacturing PMI was 48.4%. , a decrease of 0.7 percentage points from the previous quarter. The price of long products in the German market remained stable this month, and sheet products declined slightly.

(3) Asian markets At the end of November, the CRU Asian steel price index was 169.6 points, up 0.9 points month-on-month, or an increase of 0.6%. In November, Japan's manufacturing PMI was 55.1%, up 0.9% month-on-month; China's PMI was 51.4%, unchanged from the previous month, but the new orders index continued to decline, falling by 0.2 percentage points month-on-month; Korea PMI was 50.4%, up 0.2 points month-on-month. Percentage points, its new export orders index fell by 1.4 percentage points. Although the price of steel in the Far East continued to fall this month, the decline was noticeably narrower than last month.

IV. Analysis of late-stage steel market price trends As the weather turned cold, the market gradually entered the low season of demand at the end of the year, and steel production also declined. The overall supply and demand situation was weakly balanced, and steel prices fluctuated at low levels. Next year, China's economy will continue to develop steadily and rapidly. The demand for steel products will continue to grow. However, the market trend of oversupply will remain difficult to reverse in the short term, and the possibility of a sharp rise in steel prices will be less likely.

1. The steady and rapid development of the national economy next year will drive the growth in demand for steel products. Since the beginning of this year, the world economy has been slowly recovering, and China’s economic situation has remained stable. However, there are downside risks and structural pressures. As the country's "steady growth, structural adjustment" policies and measures gradually show effect. In the first three quarters of this year, the GDP grew by 7.7% year-on-year. In the first 11 months, the country’s industrial electricity consumption increased by 6.8%, which was 0.2% higher than that in the first ten months; the total volume of railway freight traffic increased by 1.4%, which is equal to 1 It increased by 0.2 percentage points in October; ***** increased by 8.41 trillion yuan, an increase of 660 billion yuan year-on-year. From the macro data, this year's national economic growth rate will be able to reach or exceed the set target of 7.5%. The overall tone of China’s economic work in 2014 is “stability for progress, reform and innovation”. We will continue to implement proactive fiscal policies and sound monetary policies, and the national economy will maintain stable and rapid development. In terms of urbanization, the state will accelerate infrastructure construction in urban agglomerations in addition to increasing the construction of affordable housing and promoting the healthy development of real estate, driving the rapid development of the steel industry such as construction, machinery, automobiles, and home appliances, and stimulating the demand for steel products to continue to maintain. increase.

2. The situation of oversupply will be difficult to reverse in the short term, and steel prices will remain low. In the first 11 months of this year, the country’s output of pig iron, crude steel and steel (including repetitive materials) was 65.5 million tons, 71.286 million tons and 97.878 million tons respectively. The year-on-year increase was 5.87%, 7.82% and 11.48%, respectively. The average daily output of crude steel was 2,134,400 tons. Based on this calculation, the total crude steel output in 2013 will reach 779 million tons, an increase of 8.7%, which is 5.6 percentage points higher than the growth rate of the previous year, and is still a relatively rapid increase. Judging from the current situation, in accordance with the State Council's "Guiding Opinions on Resolving Severe Overcapacity," the objectives and requirements for severely overcapacity in the steel industry in the next five years will be solved. Next year, the country will increase efforts to reduce excess production capacity, eliminate backward production, and reduce energy consumption and emissions. The release of steel production capacity will be restrained, but under the premise of steady and rapid economic development, steel production will continue to grow, and in the short term, there will be no fundamental change in the market environment where supply exceeds demand, and there is little possibility that steel prices will rebound sharply.

3. Steel inventories continue to decline, and steel prices continue to remain low. Affected by weak demand in the off-season and due to pressure from the return of funds at the end of the year, steel inventories will continue to approach lower levels. At the end of November, the five major steel society stocks in the major markets of the country were 12.4 million tons, a decrease of 900,000 tons from the previous month, a decrease of 6.76%, 4.68 percentage points higher than the previous month, and the first consecutive month of decline in the first 8 months. The lowest level of steel stocks in the month. In the off-season demand, reducing steel stocks mainly depends on the reduction of steel prices, and later steel prices will remain low and fluctuating.

The main issues that the market needs to pay attention to in the later period:

First, the contradiction between supply and demand in the market is difficult to reverse in the short term. Although the average daily crude steel output in November declined for two consecutive months, it was still higher than the highest output in the previous year. From a long-term perspective, as the country's phasing out excess capacity in the steel industry gradually advances, the contradiction between supply and demand in the steel market will be eased. However, in the short-term, it is difficult to reverse the situation of oversupply.

Second, the drop in the price of imported iron ore was significantly lower. From January to November, CSPI China's average composite steel price index was 103.09 points, a decrease of 9.25 points over the same period of last year, a decrease of 8.23%. During the same period, the average price of imported iron ore in the country was US$129.17 per ton, a year-on-year decrease of US$0.96/ton, a drop of only 0.74%, which was significantly lower than the decline in steel prices.

Third, the difficulty of exporting steel products will further increase. The world economy is still in a slow recovery. The demand for steel in the developed economies such as the European Union, the United States, South Korea and Australia is growing slowly, and the international trade friction in steel products is increasing. It is expected that the difficulty of exporting steel products in China will further increase next year, and the export price of steel products will also be difficult to increase. .