With the countdown to the Spring Festival, electric furnace steel enterprises in the first batch of centralized holidays last week, in this week will usher in the second batch of centralized holidays, East China, South China and some parts of the southwest of the electric furnace shutdown time, last week (January 28) before the shutdown accounted for 60%, of which East China accounted for 24%, South China accounted for 22%, Southwest accounted for 14%; However, 31% of the production was suspended before this week (February 4), of which 3% were in East China, 21% in South China, and 7% in Southwest China. The above is only the proportion of steel enterprises that have determined the shutdown time, and the remaining 9% of the electric furnaces have not yet clarified the shutdown time or will plan to stop production next week. In addition, it can be seen from the above data that South China has the largest proportion of electric furnace shutdowns, which is why South China has been falling in prices recently.
It can be seen from the survey table on the shutdown of scrap electric furnaces that most of the electric furnace shutdown time is also concentrated at the end of this week, and the demand for scrap steel will fall to a greater extent this week. Supply and demand are weak, and scrap steel is running in multiple dimensions and stability
Secondly, the weather in the coming week will also be a big blow to the black market, and it is not ruled out that there will be an early holiday. According to the China Meteorological Administration, from the 29th to the 30th, there were moderate to heavy rains in central and southern Jiangnan and northern South China, with localized heavy rains; There is light to moderate snow or sleet in the eastern and northern parts of the Qinghai-Tibet Plateau, the central and southern parts of Northeast China, and the southeastern part of Inner Mongolia, and there are locally heavy snow or blizzards. From January 31 to February 5, there will be a widespread rain and snow weather process in the central and eastern regions; There is snowfall in the eastern part of Northwest China, North China, Northeast China, Huanghuai and other places, Jianghan, western and northern Jianghuai, northwest Hunan, central and northern Guizhou and other places, and most of the above areas have moderate to heavy snow, some areas have heavy snowfall, local heavy snowfall or extremely heavy snowfall; There was moderate to heavy rain in most areas of the middle and lower reaches of the Yangtze River and south of the Yangtze River, and heavy rain in some areas. From February 1 to 4, there was freezing rain in parts of southern Henan, Hubei, central and northern Anhui, northern Jiangsu, southern Shandong, central and northern Hunan, and eastern Guizhou. Bad weather affects the arrival of scrap steel, and there is support before the scrap festival.
In terms of finished products, at this stage, with the gradual holiday of factories and the return of workers to their hometowns and other factors, the transaction of finished products is weakening, and the profits of finished products of steel enterprises continue to compress under the continuous accumulation of inventory, but take into accountAt this stage, scrap still has an advantage over molten ironUnder the continuous decline in arrivals and the absence of a significant drop in finished products, scrap steel has some support for the time being.
On the whole, at this stage, most of the price decline is the electric furnace enterprises, mainly because of the shutdown of no demand, but this phenomenon will gradually slow down with the decrease in arrivals, in addition to the long process steel enterprises are still in a normal state of production during the Chinese New Year, there is still a high demand for scrap steel, so January should be in most or to stabilize the end, the next February will basically enter the closing stage, the pace of market fluctuations will gradually slow down.