Billet price will break 3,000 yuan integer

Since the beginning of this year, the domestic steel market has been in decline and the billet market is no exception. Prices have been fluctuating. In particular, after mid-July, the billet price has significantly accelerated. Although the tailstock phenomenon appeared in the billet market at the end of July, it was only a short-lived phenomenon due to the weak terminal demand and the pessimistic atmosphere in the market. In August, the billet market accelerated to decline again. Tangshan Pu's carbon billet is approaching the 3,000-yuan integer mark, and the market has not shown any sign of warming, and bearish factors still dominate the entire market. Therefore, it is expected that the 3,000-yuan integer mark will hardly prevent the billet from falling.

1. High crude steel production remains high While domestic steel billet prices have dropped continuously in recent days, and steel mills have been in a loss-making state for a long period of time, manufacturers have stopped production and reduced production but they are "thundery and small." According to the data released by the China Iron and Steel Association, the average daily output of crude steel for large and medium-sized domestic enterprises in mid-August was 1.5083 million tons, down by 2.48% from the previous month. The Steel Association estimates that the average daily output of crude steel in the country in mid-August was 1,930,400 tons, down by 2.01% from the previous month. From the output data, it can be seen that the daily average domestic crude steel production is still high, and the domestic economic situation is still not optimistic. The demand for steel products continues to be sluggish, so the contradiction between steel supply and demand is still sharp.

2. Steel production struggles for market share Although the loss of steelmaking steelmaking is relatively serious and has continued for some time, the phenomenon of discontinued production and boring furnaces by the manufacturers is rare, especially the dominant steelworks. It is understood that most of the leading steel mills in the Tangshan region have no maintenance plan recently, and most manufacturers are in normal production. Some manufacturers stated that if the current steel mills stop production and affect the capital turnover, they will transfer the only market share to their competitors, and they will want to spend a lot of money after boring furnaces. Comprehensively, the steel mills have yet to stop production. . At the same time, the price of imported ore has dropped continuously, and the production cost per ton of steel has dropped. As a result, the space for the loss of steel mills has also been reduced. Therefore, at this time, steel mills are less likely to voluntarily stop the boring furnaces, so crude steel production will remain high in the short term.

3. Market demand is hard to see improvement Although the “Golden September” is coming soon, the steel market is still in decline. With steel prices continuing to decline, traders are still pessimistic about the outlook and do not dare to rush their goods. Most merchants adopt steel mills' direct operation methods to minimize business risks. Affected by this, steel trader's “water tank” function will be seriously damaged, making it difficult for the steel market to operate normally. In addition, the domestic economic situation is not optimistic, a gloomy "golden September" in the steel terminal market may make the manufacturers disappointed.

Considering comprehensively, it is expected that the billet price will continue to decline in the later period, breaking 3,000 yuan just around the corner.