On March 7th, the black **goods** were weak! The snail 05 contract fell to 3,695 yuan at noon, ** to 3,708 yuan ton, up 0 yuan from yesterday's **1 yuan ton03%。Iron ore 05 contract ** to 890 yuan ton, up 16 yuan ton, up 183%。
On the 7th, the national scrap steel continued to run first. Among the 295 steel companies, 0 rose and 90 fell. The main areas of price decline are: Jiangsu, Shandong, Fujian, Hunan, Hubei, Hebei, Henan, Hubei, Hunan, Jiangsu, Guangxi, Guangdong, Chongqing, Sichuan, Yunnan, Guizhou, Inner Mongolia, Liaoning, Shanxi, Gansu and other provinces in the country, with a decline of 10-80 yuan tons.
At present, the factors affecting the trend of scrap are: 1. Steel mills are generally facing the pressure of finished product sales, and it is difficult to release the accumulated finished products; 2. The arrival of steel mills continues to increase, much higher than the daily consumption, and some steel mills also reduce production slightly independently; 3. Scrap steel is currently not cost-effective, and steel mills have begun to reduce the amount of scrap steel. On the whole: under the influence of poor demand, the transaction of finished products of steel mills is poor, which makes many warehouses accumulated, inventories cannot be released, and steel mill profits are also narrowed. Therefore, in the absence of practical benefits, steel mills continue to suppress scrap. **Short-term scrap remains weak**.
Since the holiday, the steel market has continued to fall, and the steel price in many areas has ranged from 100 to 200 yuan. The steel mill also began to lose money, and the finished product factory warehouse was high, so they had no choice but to save themselves! On March 7, Yunnan steel mills planned to collectively reduce production and control the document again, and when I learned the news, the first reaction was: it's over, it's real, and scrap steel is going to eat soil again, but after a little calm, I found that this news is indeed in line with the status quo and the current logic.
Let's take a look at what the original article says:
After investigation, it was learned that there are indeed individual steel mills that have just implemented the repair plan, because the production reduction document has just come out, the implementation of the plan needs a process, for the time being, most of the steel mills have not yet implemented the production reduction action, and the current production state is maintained in February, and the impact is not obvious. According to Fubao's survey statistics on March 7, the average daily consumption of 11 sample steel mills in Yunnan Province is 1630,000 tons per day, 16% compared with the previous period, an increase of 123% from February 8 before the holiday. Judging from the survey data, the overall amount of scrap steel consumption has increased significantly, and from the perspective of production, the demand for scrap steel has increased instead of decreasing, and the production demand has little impact for the time being.
But having said that, even if there is a production demand, it is another thing for the steel mills to pay for it
According to the survey, the production of each plant is almost no profit, the inventory of slightly higher steel mills, yesterday has been in a semi-stop state, so the attitude of the mills pessimistic, has been logical, so there is no inventory to maintain a low inventory state, high inventory of the main warehouse, from the following table of the latest research on the arrival of the situation, although there is demand, but most of them can temporarily meet the needs of daily consumption, so the demand support is very limited.
Finally, let's take a look at the changes in the mainstream steel mills in Yunnan: on February 8, the mainstream reference price of scrap steel in Yunnan steel mills: high-quality pig iron heavy scrap 2670-2720, excellent edge material 2720-2760, and steel bar pelletizing 2800-2850 individual height. On March 7, the mainstream reference price of scrap steel of Yunnan steel mill: 2570-2620 for high-quality pig iron heavy scrap, 2620-2650 for excellent edge material, and 2700-2750 for steel bar pelletizing. The overall decline of Yunnan scrap steel was 100+, a new low in the past six months。It is estimated that a lot of old iron is also relying on the belief that "winter is coming, will spring be far away" in the iron, the last two years can be described as repeated defeats, repeated defeats.
Finally, let's face the reality to make a summary, from the raw material side, the cost performance of molten iron is higher than that of scrap, from the cost consideration, scrap steel is suppressed. From the spot side, the finished product is seriously accumulated, its ** downward trend is obvious, profits are under continuous pressure, the factories are basically in the loss or hovering on the edge of the cost line, and there is no new positive support on the current policy side, the upstream and downstream pessimism is strong, and the short-term decline of scrap steel is difficult to change, so the "spring" that iron friends are looking forward to may need to wait a little longer.