Spring market is expected to be slightly higher before the holiday
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The domestic steel market is showing signs of a modest upward trend, driven by rising iron ore prices and increased ex-factory pricing from steel mills. With expectations for a stronger spring market, traders are also increasing their winter stockpiles, contributing to a steady rise in steel prices. According to the Lange Steel Information Research Center's weekly price prediction model, this week (2013.1.28-2.1) is expected to see a slight increase in domestic steel market prices, with long products seeing a small pull-up and plate prices rising steadily. The Lange Steel Composite Index is projected to fluctuate around 153 points, with an average steel price of approximately 3980 yuan and a volatility of about 30 yuan. The long product index is expected to hover around 166.9, up by about 0.5 points, while the sheet price index is likely to remain near 136.3, increasing by roughly 0.1 point.
Market research from the Lange Steel Information Research Center indicates that long product prices will see a minor increase this week, while plate prices will rise more steadily. Raw material prices are mixed, with iron ore and coke remaining stable, scrap prices dropping by 50–60 yuan, and billet prices rising by 30–60 yuan.
In the fourth week of 2013 (2013.1.21–1.25), the Lange Steel (LGMI) Composite Price Index reached 152.7 points, marking a 0.12% increase from the previous week and an 8.94% decrease compared to the same period last year. The long products price index was at 166.4 points, up 0.13% from the previous week, but down 12.29% from the same time last year. The sheet price index stood at 136.2 points, a 0.11% increase from the prior week, yet still 3.52% lower than the same period last year.
Monitoring by the Lange Steel Information Research Center shows that out of 44 steel products, 19 saw price increases, 17 remained flat, and 8 declined during the fourth week of 2013. Iron ore prices rose by 40 yuan, coke by 20 yuan, scrap dropped by 30–70 yuan, and billet fell by 10 yuan.
Steel social stocks across the country have slowed in growth this week, with a total of 13.3 million tons in 29 key cities as of January 25, up 2.17% from the previous week. Wire rod, rebar, disk, hot rolled coil, cold rolled coil, and plate inventories all showed varied changes, with some experiencing declines or slower growth.
The steel market has been fluctuating, with the main contract for thread ** rising by 74 points, or 1.85%, on the week. The number of open contracts increased significantly, along with trading volume.
Macroeconomic factors are also influencing steel prices. The State Council issued the Twelfth Five-Year Plan for Marine Economic Development, aiming to enhance marine science and technology innovation and improve the sustainability of ocean resources. Additionally, the Energy Development Plan sets targets for energy consumption and efficiency, emphasizing the need for sustainable development.
The Ministry of Industry and Information Technology released guidance on accelerating mergers and reorganizations in major industries, aiming to boost industrial concentration and create competitive large enterprises. This includes cross-regional and cross-ownership mergers, reducing the number of companies, and improving competitiveness.
HSBC China’s January PMI preview hit 51.9, the highest in 24 months, indicating strong manufacturing activity. New orders and production continued to grow, signaling positive momentum for the year.
Raw material supply has also seen improvements, with increased resource reserves in coal, iron ore, and other minerals. BHP Billiton reported a 7.6% increase in annual iron ore production, reflecting strong global supply.
Industry news highlights ongoing challenges, such as U.S. tariffs on Chinese wind towers and declining shipbuilding orders. Despite some recovery, demand remains weak, affecting steel markets globally.
China Steel Association forecasts a 3.2% increase in global steel demand for 2013, driven by economic growth and rising raw material prices. However, high steel production levels may continue to pressure prices.
With these developments, the steel market is poised for gradual changes, influenced by both domestic and international factors. As the season shifts, market participants are closely watching for further trends and adjustments.