Chinaese steel prices fall in the first quarter of 2020-Boiler Tubes,Heat-Exchanger Tubes,Superheater Tubes,Supplier,Beite

Chinaese steel prices fall in the first quarter of 2020

Chinaese steel prices fall in the first quarter of 2020

What impact does the novel coronavirus pneumonia have on the steel industry?

The impact of the epidemic on the iron and steel industry is mainly concentrated in the first quarter of 2020. In the whole year of 2020, the overall situation is better than last year.

In the short term, the impact of the epidemic on the downstream demand side is greater than that on the steel production side, resulting in the decline of raw materials and steel prices. It is estimated that the industry's production and operation situation in the first quarter is not optimistic. In the medium term, with the improvement or end of the epidemic, the impact on the steel industry will gradually weaken. At the same time, with the continuous increase of national counter cyclical adjustment policies and the implementation of various stable growth measures, steel demand will usher in a wave of centralized release, and the production and operation situation of the steel industry is expected to improve in the second quarter. Throughout the year, the overall situation is better than that of last year, only because the coming of this epidemic will disturb the economic development. However, with the support of a series of policies to achieve a moderately prosperous society in an all-round way and stabilize growth, the overall operation will show a trend of first restraining and then raising. With the thorough control of the epidemic situation and the active response of the state and governments at all levels, the economy will return to normal quickly and the situation will be better in the second half of the year. Therefore, in the face of the new situation and problems in the operation of the industry brought by the epidemic situation, the iron and steel industry and enterprises should rationally analyze, accurately judge and fully grasp the market trend.

Since this year, the operation of the steel industry has shown three characteristics:

First, steel production is relatively stable.
From the production situation of key iron and steel enterprises, while further grasping the epidemic prevention and control, the enterprises basically ensured the stable operation of production and operation. According to the statistics of China Steel Association, the average daily output of crude steel of national key steel enterprises in the first ten days of January was 1967800 tons, an increase of 85000 tons or 4.52% on a ten day on month basis. In the middle of January, the average daily output of crude steel of key national steel enterprises was 1.9747 million tons, increasing by 69 thousand tons or 0.35% on a ten day on month basis. In January 2020, the national steel production remained relatively stable.

Second, the inventory has recovered significantly.
In order to meet the steel demand after the Spring Festival, before the festival, traders will generally replenish the stock, and the steel stock in January 2020 will generally show an increasing trend. According to statistics, by the end of January 2020, the total social stock of five major categories of steel products in the main market in China was 14386100 tons, an increase of 5198400 tons on a month on month basis, with an increase of 56.58%. Affected by the epidemic this year, steel stocks continue to rise in the week after the festival. As of February 7, 2020, the total social stock of five categories of steel products in the main market of the country has further increased to 20237600 tons. Steel plant inventory also increased significantly, mainly due to the delayed resumption of work in the downstream, steel demand decreased; steel market volatility, traders wait-and-see mood increased; affected by the epidemic, transportation was blocked, steel plant delivery was difficult. Due to the overstock of steel stock in some enterprises, the capital can not be returned in time, which brings great risks to production and operation. Steel stocks are expected to increase in the short term.

Third, steel prices are under downward pressure.
Before the Spring Festival, the overall supply and demand of the steel industry was stable, and steel prices remained relatively stable. After the Spring Festival, affected by the epidemic, the volume of transactions in the spot market was relatively small, the market quotation was mainly stable, and some of them fell. However, on February 3, the main contract price of screw steel in the opening session of futures fell sharply. The closing price fell 267 yuan / ton, or 7.6%, compared with that before the festival. In recent days, it continued to fall, but the decline narrowed. Under the dual influence of the slow pace of start-up in the downstream steel industry and the futures market, steel prices are facing greater downward pressure. It is worth noting that the current iron ore inventory of the steel plant is the high price raw materials before December 2019. The downward pressure of steel price increases and the high cost of raw materials will further squeeze the profit space of the enterprise. The operation situation of the steel enterprise in the first quarter is not optimistic.