The trend of steel prices in April was quite tangled. After rebounding from the previous low point to the current position, there was an obvious analysis between the market and the steel mills on the outlook for the future market. The market wanted to take advantage of the current situation of big inflation and speculate on the rising price of steel raw materials to transmit the rising costs to the downstream. However, in the current environment of high inventory and oversupply, the steel mills were more cautious about the outlook for the future market, with band operation as the main factor, In the stage of market price decline, implement the strategy of supporting the market, push up the ex-factory price of steel, and raise the inventory cost of the whole market. In the stage of market price rise, grasp the range of price increase, attract customers to order steel factory futures, and maintain a certain capacity utilization rate. Under the current domestic environment of uneven heat and cold, how will the trend of steel price in May evolve into the current high cost (including capital cost) market, A key issue of concern to all parties. Behind the tightening of regulation
The gross domestic product in the first quarter was 9631.1 billion yuan, a year-on-year increase of 9.7% and a month-on-month increase of 2.1% at comparable prices. In March, the consumer price index (CPI) rose 5.4% year on year, hitting a new high for 32 consecutive months, while the month-on-month decline was 0.2%. In the first quarter, China's GDP was 9631.1 billion yuan, with a year-on-year increase of 9.7% and a month-on-month increase of 2.1% at comparable prices. The added value of the primary industry was 598 billion yuan, up 3.5% year on year; The added value of the secondary industry was 4678.8 billion yuan, up 11.1% year on year; The added value of the tertiary industry was 4354.3 billion yuan, up 9.1% year on year.
The data shows that in the first quarter of this year, the prices of international energy, raw materials and metal ores rose by 18%, 13% and 5% respectively compared with the end of last year. In the first quarter, the factory price and purchase price of China's industrial producers rose by 7.1% and 10.2% respectively year on year. At the same time, the pressure transmitted to the downstream also began to appear, and the increase of food prices in China and Africa in CPI continued to expand.
After the release of the data in March, the macro management issued a series of regulatory signals to the market. 1) The People's Bank of China announced on the 17th that it would raise the RMB deposit reserve ratio of deposit financial institutions by 0.5 percentage points from the 21st. Zhou Xiaochuan, the governor of the Central Bank, pointed out that China's monetary policy should be appropriately tightened, and this trend will continue for some time. 2) Since the first ten days of April, the State Council has sent 8 supervision teams to carry out special supervision on the implementation of the State Council's real estate market regulation policies and measures in 16 provinces (districts, cities). Although the comprehensive inspection results still need to be summarized, most of the key points of the inspection team's summary are that the local government still needs to implement the central control policy on real estate. According to the implementation of local policies, the possibility of more stringent regulatory policies is not ruled out. Among them, local land supply and housing price control target are the key points. After studying and judging the economic situation in the first quarter of this year, the executive meeting of the State Council held on April 13 again set the tone for the next step of real estate regulation and control. The direction of regulation and control will not be wavered and the intensity of regulation and control will not be relaxed. 3) The recent continuous decline of the US dollar has once again promoted the rapid appreciation of the RMB. At the same time, under the background that the exchange rate instrument has further leapt to the foreground and become a new means to slow down imported inflation, the pace of RMB appreciation in the near future is expected to continue to accelerate.
Since this year, with the high price level and imported inflationary pressure, the central bank has been "fully firing" in the use of monetary policy instruments. Anti-inflation has become the first policy objective of monetary policy. After the reserve ratio and benchmark interest rate have been raised many times, the exchange rate instruments are also being included in the anti-inflation policy portfolio recently.
At present, from the study and judgment of the overall economic situation, we can draw two main lines of policy regulation and control. Internally, we will take controlling the rise of CPI as the main goal of policy regulation and control. On the one hand, we will strengthen the control of the price rise of agricultural products, and take increasing the production of agricultural products and controlling the circulation cost as the main measures. On the other hand, we will also be vigilant about the factors of PPI transmitting the rise to CPI in a certain period of time, and will increase the production intensity, Dilute the impulse of price rise by oversupply and solidify the liquidity of money.
To the outside world, we will take advantage of the recent downgrading of the United States and the accelerated decline of the US dollar index to accelerate the appreciation of the RMB. The goal of anti-inflation monetary policy and the current persistently weak US dollar will jointly constitute two major driving forces for the sustained rise of the RMB exchange rate. In the process of RMB appreciation, the import and export ratio will be adjusted appropriately. This year, increasing imports will also become a measure to combat inflation. Because entering the domestic market through various channels and waiting for the appreciation of hot money, it is certainly not convenient to control the funds entering the domestic market through normal trade channels. Moreover, in the context of global inflation, increasing the import of resource goods is also a means of settling hot money. Recently, There is no doubt that the surge of iron ore import and storage in major domestic ports is also a normal economic phenomenon under the background of RMB appreciation.
The game between the market and the steel mill began again. After the steel price fell sharply after the early Spring Festival, traders and steel mills formed a de facto price alliance. On the one hand, the steel mill controlled the delivery speed of the market to reduce the impact of the centralized arrival of a large number of resources on the steel market price. On the other hand, traders locked the liquidity of steel resources through pallets and other forms, with a strong reluctance to sell, which objectively created conditions for the current steel price rebound.
Recently, the steel mills have consistently lowered the ex-factory price in May, which in fact reflects the cautious bearish attitude of the steel mills towards the late steel market price. On April 19, Baosteel finally chose to lower the ex-factory price, and then the leading domestic steel mills such as Wuhan Iron and Steel Co., Ltd. have successively lowered the ex-factory price in May. Mainstream large steel mills lowered the ex-factory price of steel in May. In fact, the biggest concern is how to digest the growing supply of steel. According to the data of the China Steel Association, China's crude steel output in the first ten days of April was estimated at 19.792 million tons nationwide, of which 76 member enterprises produced 16.534 million tons of crude steel, with a daily output of 1.6534 million tons, an increase of 2.4% year-on-year. After the rebound of steel price after the holiday, the steel price in April has changed again. Although the mainstream varieties of Baosteel and other steel plants remained unchanged in April, only a few varieties rose slightly at the original price, but the prices of steel plants such as Taiyuan Iron and Steel Group, Benxi Iron and Steel Group and Wuhan Iron and Steel Group were reduced through various forms of preferential subsidies, and the range was mostly 200~300 yuan/ton. Moreover, according to the current cost calculation, the gross profit of the steel factory for producing low-end steel products such as deformed steel bars and other building materials is 300-350 yuan/ton, while the gross profit of the production of cold and hot coils is 150-250 yuan/ton. There is still a lot of room for the factory price reduction of the steel factory. According to historical experience, only when the ex-factory price of steel mills is close to or lower than the production cost, the enthusiasm of steel mills will be restrained, and the steel market price will really come out of the downturn.
From the perspective of traders, the recent rise in capital costs has become a problem that must be considered. Judging from the overall financing cost, the monthly capital cost per ton of steel will rise by 10-15 yuan. Under the condition that the trade profit per ton of steel is 50 yuan (measured by the normal market price of deformed steel), the cost of the traders' holding the spot goods has risen significantly. In this case, whether the traders have the courage to bet on the steel price increase will be a big question mark. In the early stage, the steel factory will control the delivery, and the traders will push the steel price up by locking the warehouse, However, at present, even if the downstream demand is released, it is impossible to reach the intensity of capacity release. The only thing worth looking forward to is the promotion of steel demand by the construction of affordable housing in full bloom. However, according to the recent situation of the real estate supervision team on the spot, although the construction objectives of the affordable housing have been set, the relevant supporting funds and land have not been fully implemented, which means that the construction of the affordable housing will not support the steel price very much before June.
Another thing worth studying is the follow-up effect of the earthquake in Japan. At the beginning of the earthquake, everyone thought that the damage of Japanese steel plants would benefit China's steel exports, and the related post-disaster reconstruction would be imported from China in large quantities. So the domestic steel prices rebounded after the earthquake in Japan, but from the current situation of more than one month after the earthquake in Japan, the fact is not the same as you expected. At present, the major steel mills that have been hardest hit by the earthquake in Japan have resumed production in late March. According to the data, by the end of 2010, Japan's steel production capacity was about 132.4 million tons and crude steel production was 109.6 million tons, ranking second in the world, second only to China. At the same time, Japan is also the world's largest steel exporter. Of the 109.6 million tons of crude steel, about 60 million tons meet Japan's domestic demand, and the rest are exported. On April 18, the International Iron and Steel Association estimated that the Japanese earthquake affected the annual production capacity of 7 million to 10 million tons. On April 20, Japan Steel Federation released data: Japan's crude steel output in March was 9.092 million tons, the first year-on-year decrease in 17 months, but the decline was only 2.7%.
China's crude steel output increased by more than 9% year on year, and the domestic steel export situation will be affected to a certain extent after the impact of the Japanese earthquake is clear.
Forecast of steel price trend in May
From the above aspects, the trend of steel price in May is not optimistic. Once the steel factory judges that the inflection point of steel price appears, on the one hand, it will realize hedging on the futures, and the huge amount of hedging will suppress the rebound of future steel, on the other hand, it will go ahead of the market, accelerate the price reduction, and stimulate the order of traders and downstream users by reducing the exit price, so as to transfer the risk of steel price fluctuation to the market.
On the other hand, the risk of policy regulation has been highlighted. The government has been vigilant about the continuous rise of PPI in the near future. The price control of agricultural products in the early stage will become a realistic model for the price control of industrial products. The government's measures to control the price of industrial products will mainly start from the production and circulation fields. The production field will promote the large-scale production of state-owned steel mills to ensure supply. For the circulation field, the monetary policy will be tightened, Strictly investigate the disguised financing means such as pledge trays, promote traders to speed up circulation and reduce circulation costs.
In the case of high inflation, the steel price will maintain a slight adjustment trend in May, but it will not fall sharply after the Spring Festival. In order to prevent policy risks, all parties in the market need to maintain a normal mentality and speed up circulation, and the mentality of stockpiling goods for rising must be abandoned.