April domestic market, steel prices continue to rise

Late show a trend of fluctuation

April, with steady growth, policy measures have been put to production, expected by the market continued to improve, demand for steel has increased the chain, the impact of steel stocks running low and other factors, the domestic steel market prices continue to rise, and rose significantly increased. With the sharp rise in steel prices, steel production capacity release rate, steel prices down trend. Volatility is expected to post market will run trend.

First, the domestic steel market prices continue to rise

In late April, China Iron and Steel Association CSPI steel price index was 84.66 points, the chain increased 15.79 points, an increase of 22.93 percent, 8.22 percentage point increase the previous month, the fifth consecutive monthly increase; rose 11.47 points, an increase of 15.67%.

1, steel long plate prices continue to rise, rose more than long steel plate

In late April, CSPI long products index was 86.02 points, the chain increased 17.74 points, an increase of 25.98 percent, 12.46 percent increase from the previous month; CSPI plate index was 86.52 points, the chain increased 15.26 points, an increase of 21.41 percent the previous month increased 5.35 percentage points, 4.57 percentage points lower than the long products prices increase; compared to last year, long products index rose 12.14 points, an increase of 16.43%; plate index rose 13.14 points, an increase of 17.91%.

2, the main varieties of steel prices have risen

In late April, eight varieties of steel China Iron and Steel Association monitored have increased substantially, the increase was significantly increased from the previous month. Wherein the high wire, rebar and angle ring prices rose 290 yuan / ton, 274 yuan / ton and 276 yuan / ton; rising plate, hot-rolled coil, cold-rolled sheet and galvanized sheet prices were respectively 429 yuan / ton, 369 yuan / ton, 407 yuan / ton and 426 yuan / ton; seamless steel prices rose 181 yuan / ton.

3, steel prices upward by week into May from up to down

From each week situation, April CSPI domestic steel price index showed upward trend by week. Since entering May, steel prices downward trend, which is relatively small decline in the first week, second week of decline has increased.

4, the regional steel market price changes

In April, the country of the regional market, steel prices continue to rise, and rose from the previous month were all increased. From the chain situation, North, Southwest, South, East, Northwest and Northeast China steel price index rose respectively 25.53%, 25.40%, 21.31%, 22.09%, 21.89 and 21.44 percent.

From the first two weeks of May the situation, six regional indices were down for two consecutive weeks, including North China, Northeast China, East China, Central South, Southwest and Northwest regions steel prices index decreased by 12.14% than the end of April, 8.28 %, 9.98%, 9.63%, 7.19% and 7.45%. From the drop, the price decline is most evident in North China.

Second, the domestic steel market price changes Factors

By the market is expected to increase, increasing end-user demand, low steel inventories and other factors, in April the domestic market, steel prices rose sharply.

1, macroeconomic policy measures have been put forward, the market is expected to continue to enhance

This year, in response to downward pressure on economic, national supply-side reform and demand side to promote the combination has issued a series to capacity, steady growth policies, including increased investment (irrigation, urban rail, underground pipe network, shantytowns, railways transportation, energy, environmental protection, etc.), stable foreign trade, financial support to the real economy, the full implementation of the camp changed to increase and ease the burden on local government debt to ease pressure. International Monetary Fund (IMF) this year April 12 release of the latest “World Economic Outlook”, the 2016 China’s economic growth forecast raised to 6.3% from the previous 6.5%, up 0.2 percentage points. Intensive introduction of macroeconomic policy measures for improving the market is expected to play an important role.

2, the economy has stabilized, an increase in steel demand

According to the National Bureau of Statistics, from January to April, the national investment in fixed assets (excluding rural households) increased by 10.5 percent, the growth rate of 1 – down 0.2 percentage points from March. From the chain perspective, in April fixed asset investment growth of 0.72%; the national real estate development investment grew 7.2%, of 1 – speed up 1.0 percentage points from March. Which new construction area increased by 21.4 percent, the growth rate of 1 – acceleration of 2.2 percentage points in March; in April, above-scale industrial added value increased by 6.0%, down 0.8 percentage points from March. From the chain perspective value added growth of 0.47% in April. From major steel industry, the special equipment manufacturing industry, automotive and railways, shipping, aerospace and other transportation equipment manufacturing industry increased 5.0%, respectively, 12.1% and 3.6%, respectively, last month to speed up 0.9,0.7 and 0.3 percent; general equipment manufacturing industry increased 3.8%, down 2.2 percentage points from the previous month. Overall, in April fixed asset investment, industrial added value growth rate despite the drop, but the chain growth, while the growth rate of real estate and major steel industry has accelerated, that the economy has stabilized, demand for steel has increased.

3, raw materials and fuel prices rose sharply, further support the formation of steel

According to worldsteel monitoring, in late April, the domestic iron ore price rose 512 yuan / ton, up 50 yuan / ton, an increase of 10.82%; iron ore imports (customs) average price of $ 52.57 / ton, up $ 7.29 / ton, an increase of 16.10%; coking coal price of 633 yuan / ton, up 10 yuan / ton, an increase of 1.61%; metallurgical coke price is 858 yuan / ton, rose 166 yuan / ton, an increase of 23.99%; scrap prices rose to 1602 yuan / ton, rose 381 yuan / ton, an increase of 31.20%. The main raw materials and fuel prices rose sharply, further formed on the steel support.

4, steel stocks continued to decline, stocks are low social

Since the first week of March rose to 12.68 million tons after the peak to the end of April, the nation’s major market society steel stocks declined for eight consecutive weeks, stocks fell to 9.08 million tons, 3.6 million tons more than the peak decline in early March, a decline of 28.39 %; down 4.57 million tons, a decline of 33.49%.

Third, the increase in international steel prices increase

In April, CRU international steel price index was 126.1 points, the chain increased 13.3 points, an increase of 11.8%, the fourth consecutive month, rising by 8.5 percentage points increase from the previous month; fell 7.6 points, a decline of 5.7%.

1, long products, plate prices continue to rise

April, CRU index for long products 131.7 points, the chain increased 13.2 points, an increase of 11.1%, the third consecutive monthly rise; CRU plate index was 123.3 points, the chain increased 13.3 points, an increase of 12.1%, the fourth consecutive month rise. Compared with the same period last year, long products index fell 17.8 points, a decline of 11.9%; sheet index fell 2.6 points, a decline of 2.1%.

2, North America, Europe and Asia continue to rise

(1) North America

In April, CRU North American steel price index was 137.0 points, the chain increased 11.8 points, an increase of 9.4%, an increase from the previous month increased by 7.9 percentage points. In April, the US manufacturing PMI was 50.8%, a decline of 1.0 percentage points. New orders index fell 2.5 percentage points, Imports & Exports rose 0.5 percentage points; as of late April, US crude steel capacity utilization was 71.3%, down 0.2 percentage points. This month the US Midwest mill rebar, merchant bar and sections prices turned up by the fall, wire and strip price increases to increase.

(2) the European market

In April, CRU steel price index for Europe 131.2 points, the chain increased 7.1 points, an increase of 5.7%, an increase from the previous month increased 2.8 percentage points. April, the euro zone manufacturing PMI was 51.7%, the chain increased 0.1 percentage points. In the euro area the major countries, the German manufacturing PMI was 51.8%, the chain increased 1.1 percentage points; Italy 53.9%, the chain increased 0.4 percentage points; Spain was 53.5%, the chain increased 0.1 percentage points; France was 48.0%, a decline of 0.3 percentage points. This month the German market for long products and plate prices have turned up by the fall; class steel sheet price increases last month has increased.

(3) Asia

In April, CRU steel price index was 116.8 in Asia, the chain increased 17.6 points, an increase of 17.7%, an increase from the previous month increased 12.7 percent. In April, Japan’s manufacturing PMI was 48.2%, a decline of 0.9 percentage points; Korean manufacturing PMI was 49.5%, unchanged. Chinese manufacturing PMI was 50.1%, a decline of 0.1 percentage points. Far East this month, the main varieties of steel market prices continue to rise, and the increase has increased.

Fourth, the late steel market price trend analysis

Since the release of steel production capacity quickly, so pre eased the supply and demand again prominent on steel prices rising trend constrain. It is expected to post sharp rise in steel prices difficult to continue, will become the fluctuation running posture.

1, the effects of macroeconomic policy measures will gradually appear, steel demand is relatively stable

2016 China’s economic growth target is 6.5-7.0%. In response to downward pressure on the economy around “to the production, to inventory, deleveraging, reduce costs and fill short board” and the five tasks, the state has issued a series of policies and measures to steady growth. From January to April the macroeconomic situation, China’s economy maintained a rebound trend, investment in real estate and machinery, automobile, shipbuilding and other industries have appeared stabilized trend. Judging from the recent situation, the steel industry to resolve the overcapacity embodiment has been finalized, clearly the regional overall arrangement of “Thirteen Five” period, draw up a production yearly energy Yajian or exit plan, resolve excess capacity will be in full into the official the implementation phase; “major transport infrastructure construction projects three-year action plan,” the national Development and Reform Commission, Ministry of Communications jointly issued pointed out, 2016–2018 will focus on promoting the railways, highways, waterways, airports, urban rail transit project 303, involving total project investment of about 4.7 trillion yuan. With the apparent effect of macroeconomic policy measures, the late steel demand is relatively stable.

2, steel production capacity release rate, rise in steel prices will dampen

With the sharp rise in steel prices in March and April iron and steel enterprises to resume production, the expansion intensified. According to the National Bureau of Statistics data, April crude steel production was 69.42 million tons, an increase of 0.5%; average daily crude steel production of 2.314 million tons, the highest level. According to customs data Letters, April the country’s steel exports 9.08 million tons, 1.1 million tons of steel imports, net exports of crude steel equivalent to 8.28 million tons, a decrease of 760,000 tons; in April the domestic supply of 61.14 million tons of crude steel, according to the calendar number of days, up 2.5 percent from March, compared with January – growth of 17.2% in February. Steel production rose rapidly, will enable the domestic market supply and demand increased, the late steel prices dampen demand.

3, iron ore and other raw materials and fuel prices fall, weakening the supporting role of steel

With the sharp rise in the early steel, raw materials and fuel prices showed a rising trend. But since entering May in decline trend. According to worldsteel monitoring, until the second week of May, the domestic iron ore price is 512 yuan / ton, compared with last week’s decline of 8 yuan / ton, a decline of 1.56%; scrap prices is the decline for two consecutive weeks, dropped to 1416 yuan / ton, compared with the end of April fell 186 yuan / ton, a decline of 11.61%; to May 13, CIOPI imported iron ore (iron ore fines) average price of $ 53.50 / ton, down $ 10.51 / ton than the end of April, a decline 16.42%. Coking coal prices remain stable. The main raw materials and fuel prices, steel prices weakened supporting role.

4, corporate financial tensions will continue, the price is still the main means of market competition

Since the banking system strictly control the scale of credit excess industry, iron and steel enterprise financing, financing your capital remains tense conflicts have eased significantly. According to central bank data, the end of April, outstanding RMB loans grew 14.4%, growth rate 0.3 percentage points lower from the previous month; the month of RMB loans increased by 555.6 billion yuan, a deceleration of 152.3 billion yuan, 1.37 trillion last month, much lower level. As steel enterprise products high degree of homogeneity in the market situation of supply exceeding demand, price competition is still the most powerful means of market competition.

Post-market need to focus on the main issues:

First, the resumption of production companies more, to accelerate production release. March-April steel companies focused resume production, expansion, so that national crude steel output in April reached a record 2.314 million tons. Steel production is expected to post will remain high. In the oversupply situation has not changed the situation, substantial growth in steel production increased production supply and demand. Iron and steel enterprises should carefully analyze the changes in the market, do not blindly expand production, continue to do the yield control, stable job market.

Second, the international trade environment of tension, exports will increase the difficulty. With the growth of steel exports, foreign trade disputes between China and gradually increased in the first quarter was the cumulative incidence of 16 cases. Recently, the United States on the part of domestic steel companies filed 337 investigation, the EU has refused to recognize China’s market economy status. Europe, America and Southeast Asian countries is expected to post trade protection measures will further increase the difficulty has increased steel exports, export growth will drop slightly.

Third, the iron ore market is still in oversupply situation, iron ore prices rose sharply difficult. January-April the country imported a total of 325.44 million tons of iron ore, an increase of 6.1%; in April the country imported iron ore (customs) CIF average of $ 52.57 / ton, up 16.1 percent, the second consecutive monthly rise ; 4 at the end of imported iron ore port stocks was 100.08 million tons, the chain increased 3.9%. Iron ore market is still in oversupply situation, iron ore prices rose sharply difficult.