Before the steel market will enter the state of "no market with price"

From the end of December, social steel inventory began to pick up, and a large range;Meanwhile, crude steel production remains high.Coupled with the recent U.S. -iran confrontation, the international situation has become extremely tense.Will the recent steel prices be affected by its sharp decline?

According to monitoring data show that as of January 10, 2020, the domestic top ten key cities tertiary rebar (Φ 25 mm) the average price is 3790 yuan/ton, and the end of December price flat;This is down 67 yuan/ton, or 1.7%, from the same period last year.The previous rebar 2005 contract ended down a volatile 16 yuan/ton, or 0.45%, at 3,571 yuan/ton.It can be seen from the data that rebar spot price has maintained a steady state since January, the rise and fall is very small.Rebar futures price volatility is relatively large, but the highest difference is only 74 yuan/ton.

In terms of output, according to data from the national bureau of statistics, in November 2019, China's crude steel output was 80.29 million tons, up 4.0% year-on-year. In November, the average daily output of crude steel was 2.676 million tons, up 1.79% month-on-month.China's crude steel output from January to November was 904.18 million tons, up 7.0% year on year.Lange steel research expects total crude steel production to reach about 987 million tons in 2019, up about 7 percent from last year.

Crude steel production continued to climb in November compared with previous years, and is expected to continue to rise into December.According to the statistics of Lange iron and steel net, after this winter enters heating season, blast furnace operation rate of 100 medium and small iron and steel enterprises in the country is 80% on average, 4 percentage points higher than the same period last year.The average daily output of crude steel produced by steel association enterprises after entering the heating season was 1.96 million tons, about 100,000 tons higher than the same period last year.As production increases, it will intensify the relationship between supply and demand, which will have an impact on market confidence.

In terms of inventory, we have also seen three consecutive increases and the increase rate is still increasing.According to monitoring data, the social stock of steel in 29 key cities was 7.971 million tons as of January 10, up 605,000 tons or 8.2% from the previous week.That's up 416,000 tons, or 5.5%, from the same period last year.The rapid rise of steel inventory will have a certain impact on the relationship between supply and demand in the later period.

In addition, there was a temporary detente in the us-iran confrontation, with Mr Trump shifting the battle to economic sanctions against Iran and saying he was ready to negotiate with Iran.Affected by this, the period of the return of the snail 3600 yuan integer pass.But there was good news on the U.S. -china trade front, with the commerce ministry saying the two sides will sign the first phase of the trade agreement next week and teams from both sides are in close communication on the details of the agreement.

In a series of messages, guang-hui ma said the first falling space is not large, mainly because the current price in a relatively "bottom", and close to delivery, after the market fully taking, there may be a small dip rebounded, but also should not be placed too much hope, first space of the price increases are not too big.

Although the supply pressure is prominent at present, the increase in raw material cost will make the steel production cost rise in January 2020, which will strengthen the support role of the market.Coupled with the Chinese New Year in January, construction projects will enter the final stage, the demand for construction steel significantly weakened, and most traders will be closed around the middle of January, the later market will enter a "price without market" state.