After the “steady decline” in March, domestic steel prices in April showed a trend of “first rise and then fall”. The gradual recovery of the domestic economy. Stimulated by the national dividend policy, although steel prices have rebounded in the past half month, with the slowing of the destocking rate in the spot market, the slowdown in actual demand transactions, and the weak operation of the futures market, The second half of April fell again, and the price level almost returned to the beginning of the month.

The SunSirs steel index on April 28 was 858 points, a decrease of 19.44% from the highest point in the cycle of 1065 points (2017-12-05), and an increase of 74.04% from the lowest point of 493 points on December 20, 2015. (Note: The period refers to 2011-12-01 to the present) It is only down 0.69% from the beginning of April, and the maximum amplitude within the month is 1.05%. On the whole, the domestic steel industry fluctuated widely in April.

Iron ore: Supply and demand are tightly balanced and prices continue to be firm.

In April, the price of the domestic imported mining market showed a "first rise and then stable" market, and the overall fluctuation was significantly smaller than that in March. On the one hand, although port inventories continued to decline, the magnitude of contraction was significantly reduced, and inventory levels in April remained basically stable, with a weekly average of 11.5917 million tons. Therefore, the low inventory level is relatively low, which supports the mining price. On the other hand, the resumption of production of downstream steel mills continued to accelerate, and the operating rate rebounded significantly, making the demand for ore only increase from the previous one, and the average weekly operating rate in April remained basically above 79%. Therefore, the operating rate remains relatively high, which in turn also supports the mine price.

On the whole, the domestic imported mining market shows a "tight balance between supply and demand", and the overall price is mainly firm. As of April 28, the average vehicle plate price of 62% PB powder ore port in Australia was 662 yuan / wet ton, the price of 63.5% coarse powder in Brazil was 720.12 yuan / wet ton, and the price of 62% printing powder was 613.67 yuan / wet ton, respectively It was up 2.37%, 4.33% and 1.91% from the beginning of April.

Steel: Fundamental supply exceeds demand; prices rise first and then fall.

In April, steel prices "first increased and then decreased", and the overall performance was significantly better than in March. However, the price increase caused by the improvement of the transaction was perfectly suppressed by the hollowness of the overall market, and the steel price fell slowly.

From the supply side, as of April 24, the blast furnace operating rate of 247 steel mills nationwide was 80.49%, which was flat week-on-week, down 2.67% year-on-year, and rising for 9 consecutive weeks. The average daily hot metal output was 2.536 million tons, a weekly increase of 17.2 million tons, a decrease of 82,700 tons year-on-year, and an increase of 8 consecutive weeks. Moreover, the data of the three have reached a new high level in the past three months, indicating that the production enthusiasm of steel mills has not diminished, and the market supply pressure continues to increase. It is also worth noting that various steel companies have recently issued first-quarter happy news to celebrate the "increasing production and efficiency" and the excellent results of resumption. But this also means that under the high operating rate in April, steel production in April will continue to increase.

From the perspective of inventory, as of April 28, the five largest steel stocks in the country totaled 20.205 million tons. Although they have been falling for 6 weeks in a row, the overall level has rebounded sharply from the beginning of 2020, and the inventory pressure is still greater.

From the demand side, the data shows that taking the construction steel with the most stocks on the market as an example, the weekly average and monthly average daily trading volume in April are significantly higher than in March. And the average daily transaction volume is higher than 63,000 tons, nearly 1.9 million tons a month. As of April 24, the social stock of construction steel was 18.607 million tons. The monthly consumption is only 10%. It seems that the transaction is improving, but the market destocking rate is still slow, which continues to drag down the steel price increase.

To sum up, SunSirs analyst Hangsheng He believes that the overall supply pressure of the domestic steel industry is still relatively large. Among them, the enthusiasm of steel mills for production and the slower market destocking rate are the biggest negative factors in the steel market. Although market transactions have been gradually improving, the country ’s new and old infrastructure projects are working together to promote steel consumption, but driven by market profits (according to incomplete statistics, as of April 27, 14 listed steel companies have announced the first quarter of 2020 According to the report, a total net profit of 3.074 billion yuan was achieved. Among them, 13 steel companies achieved net profit growth, and only one turned profit from loss.), And under the national dividend policy (interest rate reduction, tax reduction, subsidies, etc.), steel mills reduced production Willingness may be, but the willingness to produce at a higher price is stronger. According to previous predictions, the delayed market demand has begun to appear in April. Although May is a traditional off-season, the recovery of the export market brought about by the background of high-speed resumption and the improvement of global public health events may be in May and June appear. Therefore, it is expected that the steel price will continue to rebound in the second quarter. Steel prices are expected to fluctuate slightly in May and recover in June. Business community steel index operating range is 850-900 points.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com