company news about Steel prices will fluctuate weakly before the Spring Festival

Recently, the steel market has turned upward and downward, and steel prices have fluctuated. On January 7, regarding the trend of steel prices before the Spring Festival, a reporter from China Metallurgical News interviewed Li Xuri, general manager of Zhangxuan Hi-Tech Longxiang Development Company.

Li Xuri said that since the end of 2021, after a short-term upward trend in the steel market, due to factors such as the gradual increase in the pressure on the real estate industry and even the entire economy, the price of steel has continued to fall, dropping sharply by about 500 yuan/ton. At the end of last year, under the background of the recovery of iron ore, coking coal and coke futures, as steel inventories continued to decline, market confidence gradually recovered, and the steel market rebounded slightly after the weak shock bottomed out.

Li Xuri believes that, on the one hand, merchants still have the desire to stock up. Before the Spring Festival, the construction steel market was in the traditional low season of demand. As businesses waited for the opportunity of winter storage and the policy of ensuring supply and stabilizing prices, the market speculation space was squeezed, and steel prices will continue to fluctuate. The latest statistics show that in the first week of January this year, the national comprehensive price of construction steel was 4,818 yuan/ton, down 59 yuan/ton from the end of December 2021, and the prices of all varieties fell.

"The price of thermal coal in the early stage greatly dragged down the price of steel, but now this phenomenon has improved." Li Xuri said. On the one hand, the shortage of domestic coal supply has been significantly eased, which is conducive to the release of resources of related varieties such as coking coal; on the other hand, the increase in imported coking coal has eased the pressure on market supply. In addition, the "double-focus" futures disk has fulfilled a lot of bad expectations, and the spot correction space is limited. In addition, the "power outage" situation is gradually eased, and the supply pressure at the raw material end will be further reduced.

Li Xuri said that although the spot price has rebounded after the correction, it is a foregone conclusion that demand will continue to weaken before the Spring Festival, and it is difficult for the price of raw materials to continue to boost the price of steel. Therefore, it is difficult to guarantee the overall rise of steel prices, and it will fluctuate in the short term. On the whole, in the absence of demand support, it is difficult for steel prices to form a unilateral trend. With the decline of the raw material end and the disk surface, the possibility of local weakness cannot be ruled out.

In addition, the national construction steel transaction volume monitoring data shows that the current market transaction continues the off-season trend. Specifically, the market sentiment has been generally cautious recently, and merchants are basically purchasing on demand, and the shortage of resources in some steel enterprises still needs to be alleviated; from a national perspective, the trend of the north and south markets is divided, especially in some parts of East China, the supply is still tight, and some varieties and specifications are in short supply. . In the short term, due to the impact of continuous production restrictions and the centralized maintenance of steel companies, the overall market supply will remain low. Li Xuri said that considering that the demand side is still facing many uncertainties in the first quarter of this year, the steel price will be under pressure and support in the short term, and will continue to fluctuate weakly.