In the lead-up to the Spring Festival holiday, the steel market has gradually seen a decline in activity. With traders leaving early, the domestic steel market is expected to experience stable, minor fluctuations during the week before the holiday (February 4–8, 2013). However, with expectations of a strong spring market, traders are likely to increase their winter stockpiles, and post-holiday “aftersales†momentum is anticipated to drive a gradual upward trend in steel prices during the week after the holiday (February 18–22).
According to the weekly price forecast model from the Lange Steel Information Research Center, steel prices are expected to remain slightly volatile in the week before the holiday, followed by a modest increase in the week after. Long products are expected to see a small rise, while plate prices will show a more steady increase. The Lange Steel Price Index is projected to hover around 154.9 points, with an average steel price of approximately 4,030 yuan per ton and an average increase of 30–40 yuan. The long product index is expected to fluctuate around 168.4, rising by about 1 point, while the sheet metal index is expected to be around 138.6, up by 1.2 points.
Market research by the Lange Steel Information Research Center also indicates that long product prices will rise slightly in the week after the holiday, while plate prices will increase steadily. Raw material prices are also expected to climb. Iron ore prices may rise by 10–20 yuan, coke prices will remain stable, scrap prices could increase by 30 yuan, and billet prices are expected to rise by 90–110 yuan.
During the fifth week of 2013 (January 28–February 1), the Lange Steel Composite Price Index reached 153.8 points, marking a 0.69% weekly increase and an 8.79% drop compared to the same period last year. The long product price index was 167.4 points, up 0.56% on a weekly basis but down 12.20% year-on-year. The sheet price index stood at 137.4 points, a 0.89% weekly gain, though it still fell 3.29% compared to the previous year.
The market for iron and steel raw materials and steel products saw slight price increases in the fifth week of 2013. Among 44 categories of steel products, 35 varieties rose, 8 remained flat, and only one fell. Iron ore prices increased by 10 yuan, coke prices rose by 10 yuan, scrap prices stayed steady, and billet prices climbed by 40–70 yuan.
Steel inventories across the country have been rising at a faster pace this week. After six consecutive weeks of recovery, the rate of increase in building material stocks has accelerated, while the growth of sheet steel stocks has slowed slightly. As of February 1, the total steel inventory in 29 key cities reached 13,933,300 tons, up 633,300 tons from the previous week, representing a 4.76% increase—significantly higher than the 2.59% increase the prior week. Wire rod stocks rose 9.73%, rebar stocks increased 7.56%, and coil stocks jumped 21.76%. Hot rolled coil stocks rose 0.51%, cold rolled coil stocks fell 0.46%, and plate stocks decreased by 0.01%.
Macroeconomic factors continue to influence steel prices. In 2012, profits for large-scale industrial enterprises increased by 5.3% year-on-year, reaching 557.58 billion yuan. Profit for December alone rose 17.3% to 89.52 billion yuan. Among 41 major industries, 29 saw profit growth, while 11 experienced declines. Key sectors like agricultural food processing, general machinery, and electrical equipment showed strong gains, while ferrous metal smelting and rolling saw a significant drop of 37.3%.
The Ministry of Housing and Urban-Rural Development launched its first batch of national smart city pilots, aiming to promote new urbanization models. Over the next three to five years, these cities will be assessed and rated, with the goal of improving urban efficiency and quality of life.
China’s manufacturing PMI for January 2013 stood at 50.4%, slightly lower than the previous month but still above the 50-point threshold indicating expansion. The HSBC China Manufacturing PMI hit a two-year high of 52.3, reflecting improved factory activity. Sub-indicators such as output, new orders, and employment all rose, signaling a broader recovery in the manufacturing sector.
Globally, crude steel production reached a record high of 1.5478 billion tons in 2012, with China accounting for 46% of global output. However, China's growth rate dropped to 3.1%, the lowest in four years. Major steel producers such as Hebei Iron & Steel, Hangzhou Iron & Steel, and Anshan Iron & Steel reported significant losses in 2012 due to falling steel prices and weak demand.
In January 2013, the steel industry PMI stood at 45.3%, slightly below the previous month but showing signs of improvement. Sales volume declined, while confidence and inventory levels increased, suggesting potential for future price adjustments.
On the futures market, the rebar main contract (1305) rose 1.31% on February 1, closing at 4,168 yuan/ton, up 54 yuan from the previous day.
Downstream demand remains a key factor. China’s shipbuilding industry is expected to face continued challenges in 2013, with declining order volumes and rising costs. Meanwhile, railway construction investment is set to reach 520 billion yuan in 2013, supporting infrastructure development.
The construction machinery industry saw a relatively flat performance in December 2012, with a notable increase in sales-to-production ratios. Specialized machinery for construction materials showed the strongest growth, while other sub-sectors saw more moderate gains.
Overall, the steel market is navigating a complex landscape of macroeconomic shifts, supply-demand imbalances, and evolving policy initiatives, with both short-term volatility and long-term optimism shaping the outlook.
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