As winter approaches in the northern regions, the demand for steel products is expected to dip due to seasonal factors. However, the steel mills are gradually resuming operations, which could provide some cost support. While the long products market might face challenges due to seasonal influences, the sheet metal sector appears to be stabilizing in its manufacturing environment. There's optimism that the domestic steel market will experience mild fluctuations in the near term, with stronger performance expected in plate markets compared to long products.
According to the weekly price forecast model data from the Lange Steel Information Research Center, domestic steel market prices are likely to edge upward this week (November 12-16). Long products markets may see a slight decline, while the plate market is anticipated to remain relatively stable with a slight upward trend. The Lange Steel Composite Index is projected to hover around 150.2 points, with an average steel price of approximately 3900 yuan per ton, with fluctuations ranging roughly between 20 to 30 yuan. The Lange Steel Long Products Index is expected to fluctuate around 165.4 points, showing a minor drop of about 0.6 points; the Lange Steel Plate Index is projected to hover around 131.0 points, increasing slightly by around 1.2 points.
Based on the market survey conducted by the Lange Steel Information Research Center, it is anticipated that domestic long products market prices will decline slightly this week, whereas plate market prices should remain relatively steady. Raw material market prices are expected to vary, with iron ore and billet prices staying largely stable. Coke market prices are predicted to rise modestly by 30-50 yuan, while scrap steel market prices are likely to fall steadily by about 100 yuan.
In the 45th week of 2012 (November 5-9), the Lange Steel (LGMI) Composite Price Index reached 149.6 points, marking a week-on-week increase of 0.72%, and a year-on-year decrease of 13.20%. Specifically, the LGMI Long Products Price Index stood at 166.0 points, rising by 0.03% week-on-week, and dropping by 15.31% year-on-year. Meanwhile, the LGMI Sheet Price Index was recorded at 129.8 points, experiencing a week-on-week increase of 1.80%, with a year-on-year decrease of 9.75%.
Market data from the Lange Steel Information Research Center shows that the prices of major steel products fluctuated slightly in the 45th week of 2012, with a slight decline in flat varieties and a slight increase in falling varieties. Out of 44 standard varieties monitored, 17 increased, 4 decreased compared to the previous week; 14 remained unchanged, up by 1 compared to the prior week; 13 decreased, up by 3 compared to the previous week. Domestic iron and steel raw materials exhibited mixed trends, with iron ore and scrap market prices remaining stable, coke market prices increasing by 70-150 yuan, and billet market prices decreasing by 10-30 yuan.
This week, the national steel stock market experienced a slower decline. Nationwide steel stocks have been consistently decreasing, though the pace of decline in building materials has slowed slightly, while the decline in sheet stocks has accelerated somewhat. According to market monitoring by the Lange Steel Information Research Center, as of November 9th, steel society stocks in 29 key cities across the country were 12,279,500 tons, a decrease of 217,900 tons from the previous week. By sub-category, wire rod social inventories were 1,004,300 tons, down 2.29% from the previous week; rebar social inventories were 4,522,300 tons, up 0.12% compared to the previous week; Panluo social inventory was 264,500 tons, down 6.04% from the previous week; hot-rolled coil social inventory was 3,454,800 tons, down 3.95% from the previous week; cold-rolled coil social inventory was 1,585,900 tons, down 0.72% from the previous week; plate social inventory was 1,447,800 tons, down 1.89% from the previous week.
This week, the steel market remained within a narrow range of fluctuations. During the 45th week of 2012 (November 5-9), the market for rebars and ferrous alloys saw limited price movements, with the market sentiment becoming increasingly cautious. The settlement price this week dropped by 36 points, but in reality, it was only 5 points lower than the previous week, indicating a stable price range. This week, the main contract traded 1.07 million contracts, an increase of 123,000 contracts. The 1305 contract continued to expand for two consecutive weeks, showing enthusiasm for funds in the rebar market, and hinting at the potential emergence of some mid-range pricing.
Concerning recent macroeconomic factors impacting steel prices:
In October, the non-manufacturing PMI rose by 1.8 percentage points. The October 2012 non-manufacturing business activity index in China showed a value of 55.5%, an increase of 1.8 percentage points from the previous month. New orders and employment indices remained stable, while the business activity expectations index significantly improved, reaching 63.4%. These figures indicate a positive trend in the non-manufacturing sector, with accelerated growth.
The overall consumer price level rose by 1.7% year-on-year in October. Food prices increased by 1.8%, while non-food prices rose by 1.7%. Consumer goods prices increased by 1.5%, and service prices increased by 2.3%. From January to October, the national consumer price level rose by 2.7% year-on-year. In October, the consumer price level fell by 0.1% quarter-on-quarter.
The industrial producer price fell by 2.8% year-on-year in October. The ex-factory price of industrial producers fell by 1.6% year-on-year, while the purchase price fell by 1.7% year-on-year. Prices of means of production fell by 3.7% year-on-year, with extractive industries down by 6.4%, raw materials down by 3.4%, and processing industries down by 3.5%. Living materials prices increased by 0.2% year-on-year.
National fixed asset investment increased by 20.7% year-on-year from January to October. Industrial investment grew by 21.9%, with manufacturing investment up by 23.1%. Railway, ship, aerospace, and other transportation equipment manufacturing grew by 6.1%.
Industrial added value above designated size increased by 9.6% year-on-year in October. The textile industry grew by 11.9%, chemical raw materials and chemical products manufacturing grew by 11.9%, and ferrous metal smelting and rolling processing grew by 12.6%.
Industry news includes the restructuring of Shandong's steel industry into six major corporations by 2015. Crude steel production fell by 5.4% in late October. The Ministry of Commerce imposed anti-dumping duties on high-performance stainless steel seamless pipes from the EU and Japan.
In summary, the domestic steel market is expected to remain stable with slight fluctuations, driven by macroeconomic factors and ongoing industry adjustments.CEPAI Group Co., Ltd. , https://www.jscepai.com