Cost increases steel prices to weaken the steel mill profit surge down

Since the second half of this year, especially after the National Day, rebar demand has picked up substantially.On the one hand, due to the repatriation of funds, the real estate sector warming support terminal demand.On the other hand, the expectation of cold winter prompted the downstream to rush ahead of schedule, and the demand for rebar was gradually released after National Day.In addition, jiangsu and Zhejiang quality inspection "water penetration", steel plant maintenance and other events.

At the same time, rebar inventory is rapidly destocking, some areas are out of stock phenomenon, as steel prices go up, long process steel profits have also come to the year's high.According to SMM monitoring data, since September 10, the steel mill profit has continued to rise, reaching this year's high of 464 yuan/ton near November 20.

Last week, however, steel prices fell combined with a rise in iron ore, steel profits began to fall.

Steel mills' profits are being squeezed as coke and iron ore prices rise.At present, the downstream industry is speeding up and the terminal demand is released more than expected, but at present, the coal production area is frequently inspected for safety and the overall output is reduced.In addition, the recent iron ore spot price all the way, as of this month, the average price of 61.5% PB powder in Qingdao port has risen 45 yuan/ton to 895 yuan/ton from the month low.

Poor weather in some areas has affected construction, weakening demand.According to SMM, the rate of inventory reduction was reduced by 4.5 percentage points last week, mainly due to the overall cooling in China. Most regions in northeast China, North China and northwest China were even under the weather of heavy snow and heavy rain, while eastern China was also under the rainy weather. The construction progress of the construction site was dragged down, and the overall demand inflection point officially arrived.This week, the first phase of the snail opened down 100 points, has been maintained weak, the national average price four days fell 99.1 yuan/ton, east China and other places fell even as high as nearly 200 yuan, businessmen have no heart to take goods, rain and snow in the transport was blocked, resulting in a sharp drop in the quantity of factory warehouse.

In general, the recent steel spot transaction turned weak, steel prices weak, short - term wait-and-see sentiment.Approaching the winter, the seasonal weakness of demand as expected, building materials inventory decline also officially began to slow significantly, rebar fundamentals weak overall situation has been decided.Market pessimism began to ferment, in the short term, merchants low shipping, steel prices appear weak operation.Steel mill profits are expected to contract.The influence of northward material southward and winter storage was concerned in the later period.