High scrap prices push up the sound of finished products

Domestic steel prices: The long steel gains were the first to be blocked. This week, the domestic steel market saw a slight consolidation, with slight differences in the trend of the variety. Plates such as hot rolled coil and medium plate saw a slight increase on a week-on-week basis, while those of long products such as thread and wire saw a flat or even slight decline. Although the current demand is off-season, due to the high cost pressures faced by steel mills and distributors, and the market resources appear to be "loose", it is not sufficient and the trend of market price cuts is not obvious. The majority of steel mills this week are mainly bids or adjustments, especially for plate and steel mills, which have a large increase, and have the same compensatory growth behavior as the market. Looking ahead, due to the European debt crisis and the impact of domestic interest rate hikes, the recent stock market and futures market volatility intensified. It is expected that the domestic mainstream market will adjust to shocks next week, and does not rule out the possibility of some cities being slightly loose.

International steel prices: The high price of scrap steel has boosted the sound of finished products. The international steel market rose slightly this week. The European market continues to rise, the increase in costs and replenishment of inventory may drive the market to continue to rise in January. Over the past few weeks, the unprecedented price increases of US steel mills have caused market participants to feel uneasy and worried that the thin-sheet market has been out of control. However, ArcelorMittal North America this week promised to no longer raise the price in the first quarter of next year to inject a certain assurance to the market, and the late-stage sheet metal market may slow down. The US long products market rose slightly. More and more data show that the U.S. economy continues to recover steadily. In view of the fact that the price of scrap in the United States still shows an upward trend and the operating rate of steel mills remains low, it is expected that the long products market will continue to remain strong in the latter period. The Asian market rose slightly. Steel mills in various countries have raised steel prices to bring the spot market to a bottom. In general, the international market will continue to climb in the short term.

Iron and steel raw materials: Imported ore prices are high. The domestic iron concentrate market is in a relatively stable stage this week. Due to the impact of power restriction again in some areas, the overall resources are even more tight, and the mine stock situation is still low. Due to the recent holidays, the mines are optimistic about the market outlook, mines and traders. At present, they are not in a hurry to ship, and they think that prices will still rise slightly, and they are bullish and bearish.

This week, mining mines in the foreign mining market rose slightly, but there were fewer transactions. Up to now, the price of 63.5/63% printing mines is 177-179 USD/ton, and the domestic offer is 173-176 USD/ton, which is the new high since April of this year. At present, the steel mills are under tight funding and their purchasing desires are not strong. The market has a strong wait-and-see attitude. In the short-term, the imported ore market will continue to operate smoothly, as the external disk market continues to maintain its strength and steel mills' funds have not been eased.

Gross profit tracking: The continued recovery of gross profit of the plate. With the increase in iron ore and scrap prices this week and the weakness of long products, sheet prices continued to climb slightly. Although there is still only wire rods that can maintain profitability in various steel products, there is a slight shrinkage in gross profit margins; Rolled, cold rolled margins continued to rebound.

Inventory: Maintain the low position during the year. At present, the inventory level remains low, the upstream raw material cost price increases, and the support factors such as the general upward adjustment of the steel mill's ex-factory price have obvious support for the bottom of the market, but with the gradual shrinkage of the total demand at the end of the year, plus the effect of raising interest rates. The funding side has tightened, and cold weather has also affected the progress of the market. Dealers expect less confidence. Affected by this, it is expected that the market will continue to be weak in the next week.