Steel industry hot spot reading and market analysis

In November, Pakistan’s steel imports amounted to 188,316 tons, an increase of 40.14% from the previous year and an increase of 1.5% from the previous period. The total import value was 1.4615 billion U.S. dollars, an increase of 33.3% year-on-year, and an increase of 6.5% from the previous quarter.

Zhuo Chuang's interpretation: This year, Pakistan's steel industry has experienced a setback that has fallen into a trough and has rapidly risen. According to the data, the capacity of Pakistan’s national steel mills increased from a low of 33,000 tons/year in May this year to 440,000 tons/year at the end of October. As the largest state-owned industrial giant in Pakistan, the sharp rise in Pakistan Steel's production marks the recovery of the Pakistani steel industry. Thanks mainly to government assistance, the Pakistani side is in the process of urbanization. Its own production is far from meeting domestic demand. Therefore, it needs a large amount of imported steel to meet the domestic shortfall. The import volume of the Pakistani side will continue to increase for a while.

Prior to this, China Steel Association disclosed that the total profit of the steel industry this year will hit a new high in three years. After a few years of cold winter, the Chinese steel industry basically got rid of the loss of the entire industry. Although the steel prices are still falling and the overcapacity situation is still grim, but looking ahead, the Chinese steel industry will enter a new stage of development. The first is that the state-owned enterprise reform in the steel industry is in full swing, which will bring about the huge effect of the revitalization of assets of large state-owned enterprises; on the other hand, the new environmental protection law will help eliminate the overcapacity of steel production, and China's steel industry will enter a new stage of improving quality and efficiency.

Zhuo Chong's interpretation: China's economy has changed from high-speed growth to high-speed growth, and a new phase of shifting the mode of economic development to pay more attention to structural optimization and quality improvement has determined that the Chinese steel industry is bound to enter a new stage of development. At the same time, China Steel is experiencing a period of low-speed adjustment after a period of rapid development. In the future, the focus of the steel adjustment period will be on industrial upgrading and optimizing the allocation. In the future, with the implementation of the environmental protection law and the elimination of backward production capacity, the phased process will bring about positive development for the steel industry in the future to accelerate industrial upgrading.

★ morning reminder ★

[Pig iron] The main body of the pig iron market remained stable yesterday, with individual market prices slightly lower. The two weak supply and demand conditions in the pig iron market are difficult to reverse in the short term, and with the gradual turning of the weather, regional differences begin to appear. The northeast market is affected by the cold weather, and the transaction is deadlocked. On the last working day of 2015, the iron market is expected to remain stable.

[construction steel] Shandong building materials morning reminder: Yesterday, the main transaction price of Shandong building materials steady, leading steel factory shipments can still be, the small three-line factory pulled up 10-20 yuan / ton, the general situation of shipments. Billets rose by RMB 30/t to RMB 2,170/t yesterday. Some steel mills said that due to the increase in raw material prices and the impact of the market's daily limit, the market has a strong sense of stability. Some steel mills want to pull up slightly, but the demand for the winter is low, the price may be difficult to pull up.

[Hot Rolling] According to Zhuo Chuang Information Monitoring, the price index of hot rolled coils yesterday was 779.95 points, down by 0.7 points or 0.09% from the previous working day. Yesterday, the enthusiasm of the enthusiasm increased steadily, the good news this week increased, and the market sentiment increased. It is difficult to follow up on the demand side of the holiday market and the rebound in steel prices is insufficient. It is expected that the market for hot rolled coils will rise by 10-20 yuan/ton.

★Overseas information★

November Steel Exports in Japan In the latest data released by the Japan Steel Association (JISF), in November 2014, Japan exported 3.295 million tons of steel products. Exports fell again after two consecutive months of consecutive year-on-year growth, a decline of 3%. There has also been a dramatic drop of 8%, with a total value of US$3.06 billion in exports. Affected by this, Japan’s steel inventories remained at a high level in November, at 7.09 million tons, compared with 6.936 million tons in the same period of last month.

The billet import market in East Asia is not optimistic that Russia could benefit from the devaluation of the ruble and the possibility of further reduction of billet prices. In early December, Russian billet went to Thailand at 420-430 U.S. dollars per ton (CFR), and it was reduced to 420 U.S. dollars per ton (CFR) in the middle of the month, and it has recently heard about 410 U.S. dollars per ton (CFR).

★ Zhuochuang Viewpoint ★

The review of the nationwide steel market in 2014 showed that Golden Horse's hope for 2014 was flying away. The jingling of the 2015 will soon ring. Reviewing the performance of the steel market in 2014 can be described as a high and low limit. At the beginning of the year, the price decline was more obvious. From January 1 until now, the angle steel fell by 250-690 yuan/ton, the channel steel dropped by 180-620 yuan/ton, and the I-beam dropped by 150-620 yuan/ton.

From a quarterly perspective, the market experienced a sharp drop in the first quarter, with some markets falling by as much as RMB 220/ton, due to the sharp increase in supply and demand contradictions before and after the Spring Festival. In January, near the Spring Festival, taking into account the current situation of supply and demand reduction during the Spring Festival, the mainstream Businesses rely mainly on low logistics operations, so that the price war for price sales is the main sales model. In February, it coincides with the Spring Festival holiday. The trading market is not active in the atmosphere of the New Year, and some businesses gradually move away from the market. However, in March this year was a sales season. However, due to the significant inventory accumulation during the Spring Festival and the sluggish turnover in February, in March, both high-supply and low-confidence stimulated the low-cost resources to seize the market and drastically reduced them.

In the second quarter, the decline was still difficult to change and the market seemed to enter a chain reaction mode. The frustration of trading in the first quarter hit the market enthusiasm in the second quarter. The lack of force in the traditional demand season led to difficulties in the off-season market. The declining sales of consecutive months also suppressed the price reductions of steel mills, and the reduction in market arrival costs caused by price cuts once again took away the support of market prices. In the second quarter, it is still difficult to shake off the fate of falling prices.

In the third quarter, in July, some markets showed a bottoming-out rebound and became the first dark horse in the steel market in 2014. The reason was that the steel mills performed phased maintenance due to poor orders in early July and the market was out of stock. However, the rebound rate is relatively small, only RMB 10-40/ton. While the third quarter is still mainly weak, even in the traditional peak demand season in September, it is still difficult to curb the downward trend. The billet was refreshed in September by nearly ten percent. The low point of the year, the declining cost of upstream resources, and the continued non-following of terminal demand have made the market less prosperous. The market for transaction pricing has limited ability to digest high-priced resources. Rapidly shipping at low prices to withdraw funds is the mainstream choice.

In the fourth quarter, October was mainly driven by the increase in billets, and the Asia-Pacific meeting in November held a large-scale production limit for steel mills in North China. All the rolling mills in Fengrun District of Tangshan were discontinued, even though stocks in the steel mills were sufficient to cope with the general cargo. However, as soon as production was restricted, the speculation in the market picked up. In October and November, the market was immersed in a temporary high degree of joy; but with the end of the Asia-Pacific meeting, the speculation signal contact, the steel plant began to normal production, the weather turned cold The downstream demand continued to be deserted, and the contradiction between supply and demand surfaced again. The market was no longer able to withstand demand and the financial pressure on loan repayments. After entering December, the market fell all the way, and the price war among merchants was once again sounded. The market ushered in a new year in the low operation.