Heilongjiang Junhe Building Materials Technology Co., Ltd , https://www.junhejiancai.com
Production cuts support the narrow fluctuations in the steel market
In the current market environment, macroeconomic stability has led to a decline in steel production. According to data from the China Iron and Steel Association, the daily crude steel output of key enterprises in mid-November was 1.75 million tons, representing a 0.7% drop compared to the previous month. Nationally, the average daily crude steel output stood at 2,131,900 tons, down 0.57% on a monthly basis. With the steel market entering its off-season, demand is gradually declining. It is expected that domestic steel prices will remain relatively stable this week (December 2–6, 2013), with slight fluctuations.
According to the weekly price forecast model from the Information Research Center, the domestic steel market is projected to see minor price swings. Long product prices are anticipated to experience a slight decline, while plate prices are expected to remain steady. The national steel price index is likely to hover around 138.7 points, with an average steel price of approximately 3,610 yuan, fluctuating by about 20 yuan. The long steel price index is expected to stay near 156.1 points, showing a small decrease of about 0.3 points, while the sheet price index is expected to fluctuate around 117.5 points, with minimal changes of about 0.1 point.
Market research by the Information Research Center indicates that long product prices will fall slightly this week, while plate prices will remain stable. Raw material prices, including iron ore, are expected to show minor fluctuations. Coke prices may rise slightly, scrap prices will remain steady, and billet prices are expected to decline slightly.
Looking back at the 48th week of 2013 (November 25–29), the national comprehensive steel price index reached 138.7 points, up 0.02% from the previous week and 5.31% year-on-year. The long products price index (LGMI) was 156.4 points, rising 0.12% from the prior week but falling 2.33% year-on-year. The sheet price index was 117.4 points, down 0.14% from the previous week and 9.71% lower than the same period last year.
During the 48th week, the prices of 17 categories and 44 specifications of iron and steel raw materials and steel products showed slight variations. Five varieties saw a slight increase, four decreased, and 23 remained flat. Sixteen varieties experienced a decline, with no change compared to the previous week. Domestic steel raw material prices have been steadily increasing, with iron ore prices also rising, while coke, scrap, and billet prices remained stable.
This week, the steel market saw upward movement. In the rebar market, the performance of the main contract 1405 improved, with the closing price rising by 56 points from the previous week. The main force position for 1405 was 152.3 million hands, a reduction of 48,310 hands, with most of the reductions coming from short positions.
Steel inventories nationwide continued to decline, marking seven consecutive weeks of inventory reduction. Building materials and sheet stock declines slowed slightly. On November 29, total steel inventories in 29 key cities were 12.4471 million tons, a decrease of 98,700 tons or 0.79% from the previous week, with the decline rate slowing from 0.15% in the prior week. Wire rod inventories dropped 0.95%, bar inventories fell 0.90%, and hot rolled coil inventories decreased 0.06%. Cold rolled coil inventories declined 0.95%, while plate inventories fell 1.15%.
On the macroeconomic front, from January to October, the total profit of industrial enterprises above the designated size increased by 13.7% year-on-year to 4.6263 trillion yuan. The growth rate was 0.2 percentage points higher than in the first nine months. The main activity profit reached 468.842 billion yuan, up 5.4% year-on-year. Among 41 industrial sectors, 26 saw profit increases, while 13 experienced declines.
In the steel industry, from January to September, the iron and steel sector realized profits of 127 billion yuan, up 39.9% year-on-year. However, in October, large and medium-sized steel enterprises reported a total profit of 1.716 billion yuan, a sharp decline of 47.46% compared to the same period last year.
Downstream demand showed mixed trends. Shipbuilding completed 34.8 million dwt from January to October, down 25.4% year-on-year, though new orders surged by 183%. In the internal combustion engine sector, sales volume rose 5.42% to 4.967 million units in October, with some segments showing strong growth while others faced declines.
Overall, the steel market remains sensitive to both macroeconomic conditions and demand shifts, with prices expected to continue fluctuating in the near term.