Steel Supply and Demand Unsolved Steel City is Hard to Really Warm Up

For example, the demand is currently in the off-season steel market, the weather is getting colder and colder, the north has long been covered with snow and ice, in this case, the business's psychological expectations are not optimistic, and have no confidence in the market outlook. However, since last Tuesday, boosted by macroeconomic news, the expectation of data optimism, central economic adjustment and urbanization infrastructure demand have greatly boosted market confidence, and the stock market, futures market and spot market have performed well. Only in the case of overcapacity pressure has not been eliminated, the steel market can hardly be said to really warm up.

According to data released by the General Administration of Customs on a daily basis, China’s import of iron ore was 65.78 million tons in November, an increase of 16.7% from the previous period, setting a new high for the year. The average import price of iron ore in November was US$109.9/ton, which was 4.83% higher than the previous period. Looking at a group of data, as of December 7th, the country’s 36 major port iron ore inventories amounted to 8880 million tons, which has dropped for 10 consecutive weeks.

On the one hand, the import volume of iron ore hit a record high during the year. On the other hand, the inventory of iron ore in the port continued to decline. In November, the average daily output of domestic crude steel increased by 13.7% year-on-year, and the annual output was close to 720 million tons. People who see with their eyesight know that steel mills are still producing enough firepower. Since the profitability of steel mills has been good in the recent period, coupled with the serious losses this year, steelmakers have chosen to increase their production capacity in order to minimize losses. Only the output rose, and the price of iron ore was also lifted. As for whether the steel mills could not stop losing, they did not know.

Only a slight increase in steel profits, the steel mills will increase the production of horsepower, supply and demand pressure will be more obvious, the steel price upside will narrow, because the entire industry chain has not yet shaken off this pessimistic atmosphere, then the price and demand for the future It is bearish.