As of the 27th, the average domestic market price of hot rolled coils was 3,930 RMB/ton, down 0.51% from the previous week; the average market price of cold rolled sheets was 4,393.33 RMB/ton, up 0.46% from the previous week.
Can steel prices go up before the festival?
Supply and demand
In mid-September, the national average daily output of crude steel reached 2.857 million tons, an increase of 1.52% from the previous month; the average daily output of pig iron reached 2.5159 million tons, an increase of 1.28% from the previous month; the average daily output of steel reached 3.764 million tons, an increase of 1.21% from the previous month.
Overall, blast furnaces resumed production one after another in September, and supply increased, but inventory digestion slowed down. Driven by the expected demand for restocking before the holiday, coupled with the growth of market speculation, the current steel mills' market enthusiasm has improved compared with before, but the heavy transaction volume is not obvious, and most steel traders sell at a price-cutting.
The gross profit of hot rolled coil increased by 11 RMB/ton, and the gross profit margin rose to -1.38%; the gross profit of cold rolled sheet increased by 38 RMB/ton, and the gross profit margin increased to -10.03%.
On the raw material side, the price of coking coal was strong, the profits of coking enterprises were further narrowed, and some even lost again, and the mentality of coking enterprises to increase was strengthened. In terms of iron ore, this week, the iron ore inventory at the port was destocked in stages, coupled with the replenishment of steel mills before the festival, the ore price resisted decline. To sum up, there is strong support on the cost side before the National Day holiday.
On the whole, under the support of rigid costs and the implementation of the Fed's interest rate hike, the market is bearish in the short term, and there is little room for steel prices to fall before the holiday. However, due to the constraints of supply and demand, the increase in steel prices is not large, and it is expected that the steel prices will fluctuate to be strong before the holiday.
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