The steel market, which has been sluggish since the fourth quarter of 2021, has continued to pick up in the near future. As of the afternoon close of domestic futures markets on January 20, iron ore and rebar futures closed at 742 yuan/ton and 4,713 yuan/ton respectively, with monthly increases of 10% and 9.6% respectively. In the spot market, steel prices such as rebar and hot-rolled coils also continued to rise.
According to industry insiders, a number of national plans for the 14th Five-Year Plan have been released recently, and various ministries and commissions have clarified the direction of their policies to stabilize growth, boosting market confidence. In addition, the domestic steel market winter storage is also coming to an end, and the winter storage market has gradually become relatively active from the cold at the end of December, reflecting that from steel mills to steel traders, the expectations of the steel market to pick up in the first quarter are heating up.
"Recent policies have played a combination of 'steady growth', and the industry's confidence in the growth of investment and domestic demand in the first quarter has increased." A person in charge of a steel trade company in Hangzhou told the Shanghai Securities News reporter, "Although the winter steel market this year is not as good as in previous years, But it shows the process of recovering from cold and warm, mainly due to the role of policy force."
Winter storage means that steel traders buy steel at a low price in winter and reserve it in advance, and sell it after the steel price picks up in the next year to make a profit. According to incomplete statistics, as of now, more than 50 domestic steel mills have announced this year's winter storage policy. In general, this year's Spring Festival is early, and the winter storage inventory cycle is short. The winter storage price is generally higher than the overall level of last year and the same period in previous years, and it has risen over time, reflecting steel mills and steel traders' interest in subsequent steel prices. Gradually optimistic attitude.
Wan Chao, a construction steel analyst at the Steel Business Unit of Shanghai Steel Union, told a reporter from the Shanghai Securities News that due to the reduction in crude steel output, steel mill inventories are generally low. This year's winter storage policy is mainly based on price lock, supplemented by post-settlement. According to research, whether it is locked in price or post-settlement, the number of orders received by Winter Reserve is generally good.
"The recent positive news at the macro level has repaired the pessimistic expectations of the futures market." Wan Chao said, "The resources that steel mills can provide for winter storage are less than in previous years, and the futures are at a discount to the spot, causing the market to buy winter on futures. increased enthusiasm for storage.”
Regarding the market outlook, Wang Jing of Lange Steel Research Center said that the demand for steel is expected to improve in the first quarter, but the expectations should not be too high. In the first quarter, infrastructure is expected to grow steadily, and the probability of steel demand expansion is high. However, the downward trend of real estate investment has not yet reversed, and new construction and construction area continued to grow negatively. It is expected that the demand for steel used in real estate development and construction will pick up seasonally after the Spring Festival, but the seasonal improvement in demand intensity will be weak.
Wan Chao said that projects whose progress was affected by funding issues last year are expected to be completed at an accelerated pace after this year. Stimulated by macro policies, the demand for steel in real estate is expected to recover rapidly after the holiday, and the demand for steel for infrastructure is expected to increase.
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