In the first half of June, the performance of the demand side was acceptable. With the strong increase in raw material prices, domestic construction steel prices rose slightly. Since mid-June, with the rainy season ushering in the southern region, terminal demand has been affected, and transaction performance has obviously declined. At the same time, the daily average crude steel output of key steel companies broke through historical highs, and supply pressures were increasing day by day. With the emergence of inventory inflection points, merchants' mentality gradually weakened, and the spot price showed a tendency to soar and fall. However, considering that the current raw materials are still high, steel mills are more firm in ex-factory prices in order to pass on costs, and have some support for the spot in the short term. Therefore, the prices of plate in June rose first and then declined.
According to the price monitoring of SunSirs, domestic mild steel plate prices rose first and then declined in June. The price of Medium plate (material: Q235B; specification: 20) was 3,716 RMB/ton at the beginning of the month, and 3,714 RMB/ton at the end of the month, a decrease of 0.05% compared with the beginning of the month.
Inventory of production enterprises: as of June 28, the inventory of 30 sample mild steel plate manufacturers in China was 384700 tons, down 46100 tons from last month. On the whole, the performance of the demand side in June was lower than expected. Under the influence of the rainy season in the South and the slowing down of the demand in the north, the transaction of the market dropped significantly. In the first three weeks of this month, the decline rate of inventory was narrowed, and in the fourth week, it was more difficult to digest inventory.
In June, domestic steel market demand showed a north-south division: affected by the epidemic, projects in the northern region started late, and transactions this month maintained a certain intensity, while southern regions entered the rainy season and demand slowed down significantly. Considering that after the rainy season, the backlog of demand in the previous period may be restored to a certain extent, the transaction in early July will not be too bad; but with the advent of high temperature weather, the demand is difficult to continue to increase; therefore, national sales in mid and late July are facing challenges, whidch will drag down the trend of steel prices.
Macroeconomy: China's economy will recover quarter by quarter and consumption will continue to rebound
The time has reached the middle of the year, and will open in the second half of the year. If the key words in the first half of this year's Chinese economy are "return to work and production" and "recovery", then in the second half, "recovery" is still the key word, but this time a prefix "accelerate recovery" should be added. Recently, major institutions have issued macroeconomic outlooks for the second half of the year. The agencies generally believe that the Chinese economy will accelerate repairs in the second half of the year, and the growth rate is expected to return to pre-epidemic levels. The improvement in domestic demand provides a source of power for the steady upward movement of the economy. It is expected that investment and consumption will work together in the second half of the year.
Judging from the latest consumption data, consumption is continuing to improve, but consumption recovery is not as strong as expected. Combined with domestic and foreign factors, the next stage is facing pressure to reduce consumption willingness and consumption expenditure. Industry insiders believe that under the premise of normalization of epidemic prevention and control, macro-policy should make greater efforts to actively maintain employment, stabilize income and promote consumption.
After the heavy demand caused by the epidemic, the domestic demand for construction steel weakened in June, while the average daily output of domestic crude steel, pig iron and steel reached a new high. Under the influence of weak supply and demand, the market price was blocked and the local callback occurred; and At the same time, the consequences of high production have gradually emerged, and the prices of raw materials represented by iron ore, coke, scrap, etc. have continued to increase, causing manufacturers to shift their focus of costs upwards and form a strong support for spot prices. The increase in supply, the decrease in demand, and the increase in cost all work together, and the macro-capital funds are relatively ample. Therefore, the domestic construction steel prices remained volatile this month and did not choose a trendy direction. After entering July, the middle and lower reaches of the Yangtze River will continue to produce plums, but many places will usher in hot and scorching weather. It is expected that downstream demand will be difficult to increase rapidly. With the support of high production, social stocks are expected to re-accumulate; at the same time, forced Environmental protection and cost pressures, some blast furnaces will have limited production, and more electric furnace steel production may decline; therefore, the inventory increase process will not happen overnight. The recent macroeconomic data has picked up, and the policy of "six guarantees" will continue to follow up. We expect demand to remain resilient in July. Based on the above factors, it is expected that the prices of domestic medium and heavy plates will fluctuate upward in July.
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