Market Demand And Supply Of Steel

In 2012, the domestic steel market experienced a typical feature of supply and demand deadlock, with an average fluctuation of less than 50 yuan per ton of steel price in June. Merchants refer to it as a "constantly embarrassing market"; It is difficult for the construction steel market to achieve an effective rebound, and overall downstream demand is shrinking.
According to monitoring, the performance of the construction steel market throughout June was sluggish, with some people vividly stating that it was neither an "up market" nor a "down market", but a genuine "cold market". The terminal procurement volume of construction steel is still at a low level, and the seasonal characteristics of previous years have not been reflected. Some merchants have reported that the steel market seems to be bottoming out, "but whether it is the bottom of the market or not, I have no bottom in my heart.
The dual contradiction of shrinking demand and unreduced supply in the steel industry has always been unable to be alleviated in the industry's "great determination". The "painless and painless" reduction in production by steel mills makes people feel that the manufacturers are in a passive state constrained by many concerns. According to the latest data, although the daily average production of crude steel and steel in China decreased in May, it is still higher than the average daily production level in the first four months. The estimated daily production of crude steel in China in mid June is still close to a high of 2 million tons, indicating that there is still very little reduction or restriction in production by steel mills. The traditional off-season of high temperature and rainy consumption is approaching, and the high production of crude steel will further exacerbate the supply-demand contradiction in the market. The same is true for steel inventory. Although it is in a downward trend, the cycle has been particularly long, and the reduction rate of major varieties for 18 consecutive weeks is still less than 20%.
Due to the inability to effectively curb the release of steel production, it stimulates upstream ore prices to "wait for opportunities" to rise. Since June, the prices of domestic mines have continued to rise, with a cumulative increase of 70 yuan in ton prices. However, the procurement of steel mills is still relatively rational, and market transactions are not satisfactory. In this situation, the difficulty of further increasing mining prices in the later stage is also relatively high. The quotation for imported iron ore is also significantly rebounding, with a cumulative increase of around $5 per ton in one month. The pessimistic attitude of the mining market has slightly improved, and some steel mills have increased their procurement. However, as soon as the ore price rises, the direct market reaction is that buyers tend to wait and see, "which is also a natural constraint.