With the spring of March and even the full start of the arrival of April, the future trend of steel prices, to give up expectations, return to the reality of the stage, and this reality is the fundamentals of steel, and once the demand for improvement and policy implementation Like the current tepid, 316L stainless steel black bar prices have been down the way to correct to a reasonable level.
Supply continued to rebound slightly in the increase in pressure. In almost all enterprises are profitable and profit levels are still high (tons of steel profits in the 400 to 800) circumstances, the supply continued to increase the pressure is still increasing. According to the survey, as of March 24, the country’s 163 blast furnace capacity utilization rate reached 83.86%, nearly 1 January rose 1.18 percentage points, the future there are more than 10 blast furnace production, but also continue to have electric furnace production. The utilization rate of rebar and wire rods in the sample enterprises increased by 5.7% and 6.7% respectively in January, indicating that the supply of building materials will increase significantly in April.
Steel stocks are difficult to digest. As of 24, 5 major varieties of steel stocks are 5635,000 tons, an increase of 680,000 tons, of which thread, wire, hot rolling, cold-rolled inventory increased by 9.7%, 7.1%, 31.3%, 24.5% (7.32 million tons), wire (2 million tons) and hot rolled (3.06 million tons) inventories increased by 27%, 58.7% and 32.9% respectively.
Combined with the supply and demand analysis of the future, although the stock is expected to further decline, but difficult to digest, and does not rule out the demand is not good or when the price increase in the phenomenon of increase. Once the full banned steel action is not to force, fundamentals improved less than expected, high tons of steel profits and spot a substantial premium, steel prices will continue to return to a reasonable level. The main factor supporting the rise in steel prices in April came from the expectation of demand, the real effect of supply side reform and the effect of supply down, the price adjustment to a reasonable level or even oversold.
In short, the steel market in April, no significant improvement in demand, the supply side of the reform did not achieve effective background, the supply and demand is still facing a certain pressure, futures prices also need to repair the premium, spot steel prices in the shock is still down space.