China's steel prices have the best prospects for global minimum exports

The weather improved, the demand for the steel industry peak season began to gradually release, and steel prices stabilized and recovered. Industry insiders expect that after the start of the peak season, the domestic steel industry is expected to have a staged supply shortage.

CIIC analyst Luo Wei believes that the impact of the Chinese New Year this year is greater than in previous years, and the demand for large-scale peak season still needs to wait, and the game between dealers and steel mills is still ongoing. The market is not satisfied with the ex-factory price reduction in April. The phenomenon of inversion of market prices is still more serious, leading to more volatile prices in the previous period, but the temperature rise has already become apparent.

Undoubtedly, downstream demand is still an important concern for steel analysts. At present, domestic steel prices are the lowest in the world, and the market places great hopes on the significant increase in steel exports. At the same time, it is also worth noting whether the demand for domestic real estate starts exceeds expectations.

China Everbright Securities analyst Hu Xin believes that the demand in the third and fourth tier cities is not only better than expected, but also sustainable. On the other hand, the utilization rate of steel production capacity has reached more than 95%. Steel prices have declined, but capacity utilization remains at a high level. This shows that after the price decline, companies still maintain active production despite high output, implying that downstream demand remains strong.

Related statistics show that the total stock of steel society continued to decline slightly during the week. Total steel industry stocks fell slightly to 17.89 million tons, a week-on-week decrease of 205,400 tons, a decrease of 1.14%. In terms of sub-categories, rebar stocks fell by 123,100 tons a week, wire stocks fell by 29,600 tons; hot-rolled stocks fell by 31,700 tons, plate stocks decreased by 2,600 tons a week, and cold-rolled stocks dropped by 18,400 tons. The iron ore port stocks 79.91 million tons, 400,000 tons less than the week earlier.

At the same time, China’s iron ore stocks in ports have remained stable during the previous week, and the total inventory of 25 ports along the coast is still at a high level of over 90 million tons. The impact of the earthquake in Japan on the Asian steel market and iron ore prices began to gradually appear, and the transaction price of iron ore showed a trend of rising. In the past two weeks, China's imported iron ore market has experienced minor fluctuations, and the corresponding price indices for imported iron ore of all grades have both declined first and then increased. The Mysteel iron ore comprehensive price index rose by 0.73% on a week-to-week basis, of which the domestic ore price index rose by 1.1% on a week-to-week basis, while the imported ore index remained unchanged from the previous week.

South China ** analyst Zhang Yiwei believes that taking into account the Japanese steel companies still can not fully resume production in the short term, the international steel market supply pattern or will continue to adjust. In the near future, the transaction price of China's imported iron ore may also fluctuate slightly. The ore price will gradually enter the game period, and the probability of rising prices will be higher.