Since 2024, steel prices have continued to fall, and it began to decline sharply in March, falling to the “freezing point”. On March 18, the main contract of rebar futures fell to 3414 yuan/ton, refreshing the lowest price since June 2023, and the cumulative decline during the year expanded to 15%.
March is the traditional demand season of the steel market, and in March of previous years, with the release of terminal demand, steel prices showed a shock rise in the market. However, in March this year, traditional seasonal factors were broken, and prices as a whole showed a volatile decline in mid-early March.
The steel industry starts a chain reaction. When steel prices continue to fall, steel losses are deepening, which is forcing steel companies to control production and stop production. Then, after the steel price hit the stage of low, recently ushered in a wave of long-lost rebound: some rebar futures short profit departure to bring a rebound to the plate, while driving the spot transaction has improved, to the market to create a market reversal illusion.
From the perspective of the futures market, since the beginning of this year to the close of March 18, the main contract of rebar futures fell by nearly 500 yuan/ton, down more than 12%; Among them, the price of tons of steel fell by nearly 300 yuan in March alone. Zhuogang chain statistics show that the rebar index fell from 3947.93 points at the beginning of the year to 3470.48 points on March 15.
Lange Iron and Steel Research Center estimated data show that on March 18, the gross profit of the two-week and four-week inventory raw material cycle was in a loss state, the two-week loss range was 110 yuan to 140 yuan, and the four-week loss range was 220 yuan to 250 yuan.
Steel price missed “gold three”, what is the reason behind the decline?
On the one hand, the “golden three silver four” season is not prosperous expected early release; On the other hand, the end demand after the holiday is poor, resulting in insufficient power for steel mill production and raw material replenishment, forming a negative feedback.
As of mid-March, whether it is the market inventory or enterprise inventory of steel varieties, it is 15%-30% higher than the normal level, and the expansion of the contradiction between supply and demand leads to an increase in inventory pressure, which has a greater inhibition on prices.
Another driving factor for the decline in steel prices in mid-early March is the continued decline in the raw material end, and the cost of steel is driven down. According to its introduction, in March raw materials coke and iron ore prices continued to fall, of which coke has been six rounds of land, a cumulative decline of 600 yuan/ton to 700 yuan/ton, the average price of iron ore in March is also a cumulative decline of 11.9% compared with the average price in February. Since the beginning of this year, steel production has increased significantly compared with the same period last year, and the supply pressure on the market is large, coupled with insufficient demand, resulting in the continued weak operation of the steel market from January to mid-March.
Post time: Mar-31-2024