The domestic plate market in early August continued the downward trend, but the price decline has narrowed. Falling prices of raw materials, lower prices of steel mills, and greater supply than demand are still the main reasons for the decline in plate selling prices. However, with the further decline in market prices, the losses of steel mills have increased, maintenance and production cuts have increased, and there has been an increase. There is limited room for the price of the plate market to continue to fall. However, due to the current weak environmental impact, the domestic plate will maintain a weak operating pattern.
I. A brief overview of the mid-board market in the first half of this month
1. Price aspect
Domestic plate prices continued to decline slightly in the early August, but the decline was narrower than the previous period. As of August 17, the average price of domestic 20mm Puzhong plate was RMB 3,633/ton, which was RMB 117/ton lower than that at the beginning of the month, among which Wuhan and Fuzhou had the largest drop of RMB 180/ton, Zhengzhou, Nanjing and Hefei market saw the smallest decrease. 40 yuan / ton; another domestic highest price of Urumqi 4050 yuan / ton, the lowest price of Tianjin's 3400 yuan / ton.
2. Demand side
In July and August, which was originally the off-season of steel demand, coupled with the sluggishness of the two pillar industries of manufacturing and shipbuilding, the plate market demand was greatly affected, and there was no sign of any recovery in the short term. At present, the total number of terminal purchase orders is low, and because the market price continues to fall, buyers try to delay the procurement progress to reduce their own costs, and now it is unrealistic to expect the improvement of demand to stimulate the market.
3. Steel price adjustment
The domestic plate production enterprises continued to lower their factory prices in the first half of August. However, compared with the market price, the downward adjustment of the factory price of steel products has a lag, and the rate of recovery is insufficient. However, taking into account the impact of the steel mill's falling prices on the market mentality, the market price will often continue its downward journey after the steel mills make up the fall.
4. Market inventory
From the inventory point of view, in August domestic inventories in the plate market declined slightly. As of August 17, 2012, the total amount of medium board stocks in the country was 1,492,800 tons, a decrease of 0.48 million tons compared with the end of July 2012, a decrease of 0.32%; and the total stock of medium board in Shanghai was 362,800 tons, compared with 2012. 7 The end of the month decreased by 0.56 million tons, a decrease of 1.52%. With the further decline in market prices, traders have little enthusiasm for stocking, but due to poor demand, domestic plate stocks have a smaller decline.
Second, late domestic plate market price weaknesses
1. The external environment is not optimistic and the market lacks confidence to support
At present, the economic environment at home and abroad still shows no signs of improvement. On the contrary, a series of data reflects the predicament faced by the economy. From August 14 to 15, the Central Political Bureau Standing Committee and Premier Wen Jiabao visited Zhejiang, Hangzhou, Huzhou, and Jiaxing to investigate the economic situation and pointed out that the fundamentals of China’s economic development are good. Some areas There are many favorable conditions for positive changes to occur in order to maintain stable and rapid economic development. At the same time, we must also clearly see that the foundation for economic stabilization is still not solid and that economic difficulties may continue for some time. In view of this, in the short term, there will be no major economic stimulus plan for the country's policies. This has a greater impact on market confidence, and the recent performance of the stock market, er, and electronic trading systems confirms this.
2. Reduced production and maintenance schedules of steel mills continue to increase, and the pattern of supply and demand may improve in the later period
According to the survey, the time of entry into August, domestic plate production enterprises overhaul, reduce production efforts are gradually increasing. According to the latest news, in August, Masteel's medium and heavy plate production line was overhauled on the 10th, Anyang Steel's plate production line was overhauled on the 7th and the heavy steel plate production line was overhauled on the 17th, and the second-line steel plant in East China was up to 50. In addition, Tangshan Iron & Steel plans to start maintenance in late August. The production line for the plate of Shaoguan Steel will be maintained for two months. Wenfeng, Puyang, Yingkou, etc. of the North Steel Plant have also increased their orders. Reduce production efforts. The increase in steel production and maintenance will ease the pressure on the market and change the tension in supply and demand. This will also provide energy for the price to stop falling.
3. Downstream demand remains weak, and market price rebound is weak
In July 2012, China's Manufacturing Purchasing Managers Index (PMI) was 50.1%, a slight decrease of 0.1% from the previous month, slightly higher than the critical point. Among them, the production index was 51.8%, 0.2 percentage point lower than the previous month. The lowest point since December 2011 showed that the growth rate of manufacturing production continued to slow; the new orders index was 49.0%, down 0.2 percentage points from the previous month, and was below the critical point for three consecutive months, indicating that the demand in the manufacturing market continued to show The downward trend; the employee index was 49.5%, a decrease of 0.2 percentage points from the previous month, and was below the critical point for two consecutive months, indicating that the employment of manufacturing companies continued to decrease.
An important source of power that can support the strength of the market is the improvement of downstream demand. If the terminal purchases show an explosive growth, then the buying situation will surely push up the market price. However, nowadays, what is facing us is the level of demand that has been in the doldrums. From this point of view, if we want to change the supply-demand relationship, we can only rely on the limited production of steel mills, but the factory reductions are mostly passive operations, so the market impact will not be affected. Very fierce, it also created a lack of market price rebound.
On the contrary, down-stream downstream demand will force merchants to adopt price-preferred strategies, while price competition will lead to weaker market prices.
4. Raw material prices weakened and cost support weakened
In the recent period, the domestic raw material market continued to weaken, but the decline in market prices also narrowed. Market prices such as iron ore, coke, and billets continue to show a declining trend. This is undoubtedly a good news for plate producers. The reduction in production costs favors the operation of steel mills, but unfortunately, because of the plate market price The decline is too fast, and the steel mills generally have a certain stock of raw material reserves, so the decline in the production cost of steel mills is obviously not keeping up with the price drop in the plate market; on the other hand, even if the latest raw material costs are accounted for, the steel mills have no Profits can be said, so manufacturers plan to reduce production.
The falling prices of raw materials will reduce the production costs of steel mills, while the decline in the ex-factory prices of steel mills will affect the market mentality, and will not facilitate the stabilization of market prices.
In summary, the negative factors in the current market are still dominant, and the decline in domestic plate stocks is not obvious. In the short-term, the pattern of weak plate market prices will not change; however, the maintenance and production reduction of steel mills are also increasing. The pattern of supply and demand in the later period may be improved, which is also an important support for the market price to rebound. Taking into account the influence of various factors, I believe that the domestic plate market will also operate weakly in late August, but the price downside is limited.
I. A brief overview of the mid-board market in the first half of this month
1. Price aspect
Domestic plate prices continued to decline slightly in the early August, but the decline was narrower than the previous period. As of August 17, the average price of domestic 20mm Puzhong plate was RMB 3,633/ton, which was RMB 117/ton lower than that at the beginning of the month, among which Wuhan and Fuzhou had the largest drop of RMB 180/ton, Zhengzhou, Nanjing and Hefei market saw the smallest decrease. 40 yuan / ton; another domestic highest price of Urumqi 4050 yuan / ton, the lowest price of Tianjin's 3400 yuan / ton.
2. Demand side
In July and August, which was originally the off-season of steel demand, coupled with the sluggishness of the two pillar industries of manufacturing and shipbuilding, the plate market demand was greatly affected, and there was no sign of any recovery in the short term. At present, the total number of terminal purchase orders is low, and because the market price continues to fall, buyers try to delay the procurement progress to reduce their own costs, and now it is unrealistic to expect the improvement of demand to stimulate the market.
3. Steel price adjustment
The domestic plate production enterprises continued to lower their factory prices in the first half of August. However, compared with the market price, the downward adjustment of the factory price of steel products has a lag, and the rate of recovery is insufficient. However, taking into account the impact of the steel mill's falling prices on the market mentality, the market price will often continue its downward journey after the steel mills make up the fall.
4. Market inventory
From the inventory point of view, in August domestic inventories in the plate market declined slightly. As of August 17, 2012, the total amount of medium board stocks in the country was 1,492,800 tons, a decrease of 0.48 million tons compared with the end of July 2012, a decrease of 0.32%; and the total stock of medium board in Shanghai was 362,800 tons, compared with 2012. 7 The end of the month decreased by 0.56 million tons, a decrease of 1.52%. With the further decline in market prices, traders have little enthusiasm for stocking, but due to poor demand, domestic plate stocks have a smaller decline.
Second, late domestic plate market price weaknesses
1. The external environment is not optimistic and the market lacks confidence to support
At present, the economic environment at home and abroad still shows no signs of improvement. On the contrary, a series of data reflects the predicament faced by the economy. From August 14 to 15, the Central Political Bureau Standing Committee and Premier Wen Jiabao visited Zhejiang, Hangzhou, Huzhou, and Jiaxing to investigate the economic situation and pointed out that the fundamentals of China’s economic development are good. Some areas There are many favorable conditions for positive changes to occur in order to maintain stable and rapid economic development. At the same time, we must also clearly see that the foundation for economic stabilization is still not solid and that economic difficulties may continue for some time. In view of this, in the short term, there will be no major economic stimulus plan for the country's policies. This has a greater impact on market confidence, and the recent performance of the stock market, er, and electronic trading systems confirms this.
2. Reduced production and maintenance schedules of steel mills continue to increase, and the pattern of supply and demand may improve in the later period
According to the survey, the time of entry into August, domestic plate production enterprises overhaul, reduce production efforts are gradually increasing. According to the latest news, in August, Masteel's medium and heavy plate production line was overhauled on the 10th, Anyang Steel's plate production line was overhauled on the 7th and the heavy steel plate production line was overhauled on the 17th, and the second-line steel plant in East China was up to 50. In addition, Tangshan Iron & Steel plans to start maintenance in late August. The production line for the plate of Shaoguan Steel will be maintained for two months. Wenfeng, Puyang, Yingkou, etc. of the North Steel Plant have also increased their orders. Reduce production efforts. The increase in steel production and maintenance will ease the pressure on the market and change the tension in supply and demand. This will also provide energy for the price to stop falling.
3. Downstream demand remains weak, and market price rebound is weak
In July 2012, China's Manufacturing Purchasing Managers Index (PMI) was 50.1%, a slight decrease of 0.1% from the previous month, slightly higher than the critical point. Among them, the production index was 51.8%, 0.2 percentage point lower than the previous month. The lowest point since December 2011 showed that the growth rate of manufacturing production continued to slow; the new orders index was 49.0%, down 0.2 percentage points from the previous month, and was below the critical point for three consecutive months, indicating that the demand in the manufacturing market continued to show The downward trend; the employee index was 49.5%, a decrease of 0.2 percentage points from the previous month, and was below the critical point for two consecutive months, indicating that the employment of manufacturing companies continued to decrease.
An important source of power that can support the strength of the market is the improvement of downstream demand. If the terminal purchases show an explosive growth, then the buying situation will surely push up the market price. However, nowadays, what is facing us is the level of demand that has been in the doldrums. From this point of view, if we want to change the supply-demand relationship, we can only rely on the limited production of steel mills, but the factory reductions are mostly passive operations, so the market impact will not be affected. Very fierce, it also created a lack of market price rebound.
On the contrary, down-stream downstream demand will force merchants to adopt price-preferred strategies, while price competition will lead to weaker market prices.
4. Raw material prices weakened and cost support weakened
In the recent period, the domestic raw material market continued to weaken, but the decline in market prices also narrowed. Market prices such as iron ore, coke, and billets continue to show a declining trend. This is undoubtedly a good news for plate producers. The reduction in production costs favors the operation of steel mills, but unfortunately, because of the plate market price The decline is too fast, and the steel mills generally have a certain stock of raw material reserves, so the decline in the production cost of steel mills is obviously not keeping up with the price drop in the plate market; on the other hand, even if the latest raw material costs are accounted for, the steel mills have no Profits can be said, so manufacturers plan to reduce production.
The falling prices of raw materials will reduce the production costs of steel mills, while the decline in the ex-factory prices of steel mills will affect the market mentality, and will not facilitate the stabilization of market prices.
In summary, the negative factors in the current market are still dominant, and the decline in domestic plate stocks is not obvious. In the short-term, the pattern of weak plate market prices will not change; however, the maintenance and production reduction of steel mills are also increasing. The pattern of supply and demand in the later period may be improved, which is also an important support for the market price to rebound. Taking into account the influence of various factors, I believe that the domestic plate market will also operate weakly in late August, but the price downside is limited.
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