August 2012 Steel Market Analysis Report

The overall performance of the steel market in July 2012 was: the international steel market prices continued to fall, the global crude steel production decreased slightly year-on-year; domestic steel production rebounded, and steel exports grew faster; domestic steel raw material prices fell sharply; domestic steel market prices were sharp Fell.

1. International steel prices continued to drop, and global crude steel production decreased slightly year-on-year. In July 2012, the international steel market prices generally fell. Among them, the price of steel in the United States dropped slightly; the price of steel in Europe continued to fall; the export quotation from the Commonwealth of Independent States fell slightly; the overall steel market in Asia was relatively weak. According to Steel House (Global) steel benchmark price index, by the end of July, the global steel price index was 117.65 points, down 6.49 points from the end of last month. In June, global crude steel production decreased slightly year-on-year. According to statistics of the World Steel Association (WSA), in June, the world's 62 major countries and regions produced 12,790,000 tons of crude steel, a year-on-year decrease of 86,000 tons, a decrease of 0.1%; the monthly average daily production was 4.263 million tons, an increase of 1.2%. From the current international market situation, the global crude steel production is expected to decline, supply pressure will slow down; the global economic growth rate declines, the general performance of the manufacturing industry is poor, the downstream demand is relatively weak, some countries began to cut interest rates to stimulate economic growth; European debt The crisis has a tendency to develop towards the core countries; there is little room for further declines after the prices of iron ore and scrap have fallen significantly. It is expected that the decline in the international steel market price in August will gradually slow down.

In June and June, domestic crude steel output rebounded slightly. In June, domestic crude steel output rebounded slightly: In June, China’s crude steel, pig iron, and steel production were 60.213 million tons, 55.715 million tons, and 84.474 million tons respectively, an increase of 373,000 tons year-on-year. 594,000 tons and 5.28 million tons, respectively, an increase of 0.6%, 1.1% and 6.7%, respectively, the average daily output of 200.71 tons / day, 1.8572 tons / day and 2.158 million tons / day, an increase of 31,800 tons / day , 0.75 million tons/day and 181,300 tons/day, a year-on-year increase of 1.6%, 0.4% and 6.9% respectively.

In June, China’s steel exports grew rapidly: In June, China imported 110.07 million tons of steel, a year-on-year decrease of 101,700 tons, a decrease of 8.5%, a decrease of 21.02 million tons, an average daily decrease of 13.2%, and an export of 5.257 million tons of steel, a year-on-year increase of 90.82. Ten thousand tons, an increase of 21.1%; an increase of 0.16 million tons, an average daily increase of 3.4%; net exports of 410.68 million tons of steel, an increase of 1.01 million tons, an increase of 32.6%; an increase of 217,700 tons, the daily average growth of 9%. In June, China imported 33,400 tons of steel billets; 137.3 tons of billets were exported, and billet import and export volume continued to be at a relatively low level. The steel was converted into crude steel. In June, China imported 1,204,400 tons of crude steel, a year-on-year decrease of 103,700 tons, a decrease of 7.9%, and a chain loss of 219,000 tons, an average daily decrease of 12.6%. 5.54 million tons of crude steel were exported, an increase of 963,500 tons, an increase of 21.1%; an increase of 1,17 tons, an average daily increase of 3.4%. In the same month, the net export of crude steel was 4.3357 million tons, an increase of 1,067,300 tons, an increase of 32.7%, and an increase of 220,800 tons, an average daily increase of 8.9%.

In June, domestic crude steel resource supply declined slightly: After calculation, China's crude steel and steel resource supply in June was 55,877,300 tons and 80,367,200 tons, respectively, a year-on-year decrease of 6.943 million tons and 4.27 million tons, respectively, a year-on-year decrease of 1.2%. Increased by 5.6%.

In July and July, the domestic steel market price dropped sharply. In July, the domestic steel market price fell sharply. As of July 31, Steel Home (China)'s benchmark steel price index SH_CSPI was 94.52 points (4,088 yuan/ton), down by 7.55 points (325 yuan/ton) from the end of June, down 4.22% from June. In terms of sub-categories, the steel home (China) long product benchmark price index SH_CSPI-L was 105.78 points (3,845 yuan/ton), which was 8.34 points (304 yuan/ton) lower than the end of June, 4.32% lower than that in June; The home plate (China) benchmark price index for flat products SH_CSPI-F was 84.19 points (3959 yuan/ton), which was 7.1 points (334 yuan/ton) lower than the end of June, 4.37% lower than that in June; Steel House (China) Ltd. The benchmark steel price index SH_CSPI-S was 104.82 points (4222 yuan/ton), which was a decrease of 9.06 points (365 yuan/ton) from the end of June, and was 4.44% lower than that of June; Steel House (China)'s stainless steel benchmark price index SH_CSPI-SS It was 80.79 points (17,707 yuan/ton), down by 0.94 points (206 yuan/ton) from the end of June, and down by 0.78% from June.

Construction steel: In June, the output of domestic steel mills did not decrease, the construction steel output once again hit a record high, and the pressure on resource supply remained high. Affected by high temperature and rainfall, the construction of downstream construction sites slowed, and the demand for construction steel market slowed down. From January to June, the country started construction of 4.7 million sets of affordable housing, 67.14% of tasks completed, 2.6 million sets basically completed, and 52% compliance, maintaining a high overall construction and completion rate. In addition, the price of iron ore and coke dropped sharply, and the production cost of the steel mills moved down as a whole. However, the loss of the industry was still expanding, and the intensity of steel mills' limited production and maintenance continued to increase. After the domestic construction steel market experienced a sharp and rapid decline this month, the market continued to fall. It is expected that the domestic construction steel market will be dominated by shocks in August 2012, and some oversold markets are expected to continue their upward trend.

Plate: In July, the prices of domestic plate market dropped sharply. By the end of the month, the average prices of Q2358mm and 20mm plate in the 28 major markets nationwide were 4,076 yuan/ton and 3,772 yuan/ton, respectively, down 356 from the price at the end of last month. Yuan/ton and 358 yuan/ton. Judging from the market situation in August, the shipbuilding and machinery industries of the plate and steel industry in the medium and heavy plates all performed poorly, and the market transactions were in poor conditions. Most of the dealers were reluctant to stock more inventory when there was no obvious improvement in downstream demand. The order status of steel mills is not satisfactory. Some steel mills can only maintain production orders for one week or so. In the latter stage, steel mills are under pressure to cut production and stop production. It is expected that domestic plate production will decline, which will help reduce market supply pressure. It is expected that the domestic plate market will stabilize in August and stabilize and resume its upward trend.

Hot and cold coils: In July, the price of hot and cold coils in the domestic market accelerated to fall, and the single-month decline reached the highest level since 2008. In less than a month, the central bank lowered the benchmark deposit and lending rates of banks again. Combined with the release of macroeconomic data in the second quarter, the economic downturn did not appear to have bottomed out. The market’s expectation of the steel market turned pessimistic and domestic hot and cold. The price of coils accelerated and the market turnover shrank. With the release of “reduced production” information from steel plants, dealers’ willingness to reduce losses has increased, and the decline in hot and cold coils has gradually slowed down. Prices in some key regional markets have basically stabilized and have shown signs of a slight rebound. By the end of the month, the average prices of 1.0mm cold plate, 2.75mm hot coil and 5.75mm hot coil in 28 major markets nationwide were 4,666 yuan/ton, 3913 yuan/ton and 3775 yuan/ton, respectively, down 221 yuan from the end of last month. Tons, fell 370 yuan / ton and fell 378 yuan / ton. As the current decline in raw material prices corresponds to the decline in the cost of steel production, it is closer to the month's decline in steel prices, the loss of major steel mills did not appear to expand the trend, the steel mills are not willing to voluntarily reduce production, the demand for raw materials will remain high in the latter part . In July, the price of major domestic raw materials is expected to fluctuate near the current price, and it is unlikely that further major declines will occur. Taking into account the existence of order pressure on the steel mills, it is expected that the pricing policy announced by the steel mills in August will still have room for downward adjustment. As the expected macroeconomic situation stabilizes, market demand will gradually improve, and domestic cold and hot coil prices are expected to gradually stabilize. And recovery recovery.

Coated coils: In July, the market price of coiled coils fell sharply. In June, the automobile production and sales situation was generally stable, with a slight decrease from the previous quarter and a relatively fast growth year-on-year. In the first half of the year, the overall decline in home appliances. In June, the production of coated plates continued to increase, and the output of coated plates decreased slightly. The production cost of domestic steel mills continued to fall this month. In August, the ex-factory prices of steel mills were mainly stable or reduced. In the later period, the cost of arrival of new resources in various markets fell steadily. Fund liquidity is expected to increase further in August, and the average price of coated coils in the domestic market has fallen below the two-year low, and downstream demand will continue to be slowly restored next month. It is expected that the market price of coated coils in August 2012 Half of the month will be in a weak trend and will gradually stabilize in the second half.

Hot-rolled strip: In July, the domestic hot-rolled strip market price fell sharply. According to the Steel House's data, by the end of July, the average prices of 2.75*235mm, 5.5*520mm, and 5.5*685mm carbon strips in 12 major cities across the country were 3,843 yuan/ton, 3,869 yuan/ton and 3,891 yuan/ton respectively. Prices fell by 288 yuan/ton, 283 yuan/ton and 284 yuan/ton respectively from the end of last month. Due to the sharp drop in the billet price this month, the northern strip companies lowered the ex-factory prices continuously. In addition, the falling prices of construction steel and hot-rolled coils increased, and strip merchants were more willing to destock, and the domestic strip prices fell sharply. In August, with the increase in production and reduction of steel mills, the supply of resources will decline, and downstream demand, which has been restrained by falling prices in the previous period, will be released. It is expected that strip prices in the domestic market will recover in August.

Stainless steel: In July, the prices of stainless steels in major domestic markets all fell slightly. In this month, nickel, the main raw material, oscillated and fell, the price of high-carbon ferrochromium fell slightly, and the production cost of steel mills fell slightly. This month, the dominant steel producer TISCO set up a stable price, forming a certain support for market prices. Since July, downstream demand has continued to be poor. Businesses are cautious about the outlook and are mainly wait-and-see. The total market inventory remains relatively low. According to the current market situation, it is expected that the domestic stainless steel prices in major markets will continue to fluctuate in August, and the possibility of big ups and downs is less likely.

Seamless steel pipe: In July, the market price of the national seamless steel pipe fell sharply, and the market turnover was sluggish. Merchants generally reduce inventory to avoid the risk of falling prices, and the overall market inventory is at a low level. The contract organization of pipe blanks and seamless billet rolling mills are both unsatisfactory, and the weakening of cost support for raw material prices has weakened. The tube billet market prices continued to drop, billet manufacturers contract organization is not ideal, some manufacturers reduce production. In June, the output of seamless steel tubes in China was 2.399 million tons, the export volume was 482,700 tons, the import volume was 18,500 tons, and the apparent consumption was 1.935 million tons, which was a decrease of 2.49% year-on-year. At present, there is no significant reduction in domestic steel mills, and market demand is temporarily difficult to rebound. It is expected that the national market price of seamless steel tubes in August will generally show a weak consolidation trend.

Structural steel: In July, the domestic market price of structural steel fell sharply, and the cumulative decline in some markets exceeded 500 yuan/ton in a single month, setting a record of the largest monthly decline since July 2009. Affected by the continuous and significant decline in prices, the structural steel market is generally under a heavy pessimistic atmosphere. Businesses often take a wait-and-see attitude. Transactions continue to decrease over the previous month, and social inventories continue to rise. In particular, the inventories of relevant manufacturers have risen significantly. For steel mills, due to insufficient orders and high stocks, most steel mills lowered their prices for several consecutive months this month, and the cumulative reduction was similar to the decline in market prices. By the end of this month, most of the steel mills had already suffered significant losses. The factory began to plan inspections, cut production or even stop production. In August, with the gradual increase of steel mills with production cuts and production cuts, the supply of structural steel market resources is expected to be significantly reduced, and most of the steel mills are already in a substantial loss, and the reduction in late factory prices may be reduced, but at the same time, 8 The month is the traditional off-season consumption period. Downstream demand is unlikely to improve. It is expected that the domestic structural steel market prices will continue to fall in early August, and it is expected that the price will continue to fluctuate and recover.

In July and July, the price of steel raw materials dropped sharply. In July, the domestic prices of steel raw materials fell sharply. Domestic iron ore and scrap prices fell sharply, and ferroalloy and coke prices continued to fall. According to Steel House (China)'s benchmark price index for steel materials (SH_CMPI), as of July 31, the raw material price index was 143.84 points, down 12.63 points from the end of last month and a month-on-month decrease of 3.49%. The iron ore price index was 164.99 points, down 7.78 points from the end of last month and 0.63% month-on-month; the scrap price index was 117.92 points, down 15.26 points from the end of last month and 5.12% month-on-month; the ferroalloy price index was 89.64 points, compared with the end of last month. It fell 3.71 points, a month-on-month decrease of 2.93%; the coke price index was 145.17 points, a decrease of 21.83 points from the end of last month and a month-on-month decrease of 7.29%.

Iron ore: Domestic iron ore prices fell sharply in July. The overall steel price dropped sharply. The steel mills reduced their purchases to consume more inventory. In addition, the loss of the steel mills increased, and the maintenance of some steel mills began to increase in the later part of the year. Within the month, the price of iron fines in Hebei fell by 70-80 yuan/ton, while that in southern China dropped by 20-50 yuan/ton. In terms of imported ore, the accelerated decline in the middle and late of the year resulted in a total decrease in PB fines in Australia ranging from 19-20 to 115-116 U.S. dollars per ton, and 65% in Brazilian ore fines falling by 22-23 U.S. dollars to 125-126 yuan per ton. In August, the overhaul of domestic steel mills may further increase, and iron ore prices are running at a relatively low level. If the price of iron ore continues to fall, local mines will reduce supply, import mines will show an advantage, and the purchase volume of steel mills will increase. August iron The ore market will remain slightly fluctuating.

Scrap: Affected by the continuous decline in steel prices, domestic scrap prices dropped sharply in July, and in some regions, monthly declines reached 400 yuan/ton or more, reaching a new low since 2012. Some large and medium-sized steel plant electric furnaces also stopped production, and market demand was noticeably weakened. . At the same time, due to the recent rebound in scrap prices in the international market, and widening spreads with the domestic market, steel mills and traders generally slow down their purchases, and China’s scrap imports have declined. From the market situation in August, after experiencing a sharp decline in the previous period, the current scrap prices have been lower than the cost of hot metal, and there is limited room for further price declines. At the same time, as domestic steel mills are gradually reducing production intensity, especially in the case of more production cuts and limited production of electric furnaces, large and medium-sized steel mills can basically meet the production needs of 20-30 days in the current inventory, and their willingness to make up stocks is not strong in the short term, and scrap prices have risen. Difficult. It is expected that the domestic market scrap price will fluctuate slightly in August.

Ferroalloy: In July, the domestic ferroalloy market price continued its downward trend in June. Affected by the sharp drop in domestic steel market prices, the ferro-alloy market panic and aggravated the negative atmosphere. Market prices continued to fall. The downstream market continued to wait and see, and the appropriate amount of supplemental inventory was the mainstay. In July, the ferroalloy industry in southwestern China resumed the implementation of the flood water price policy (Guangxi is a subsidy for electricity price), and the northwestern region has fully introduced the tariff subsidy policy, which has effectively stimulated and ensured the improvement of the operating rate of ferroalloy enterprises. In addition, due to the summer off-season and the financial crisis, China’s exports of ferro-alloys were weak in July and the situation in August is still severe. It is expected that the domestic ferroalloy market will continue to face cautious purchases from downstream steel mills in August and the pressure on market inventory consumption will be slow. The market prices of ordinary alloys and special alloys will continue to fall overall.

Coke: Domestic coke prices fell sharply in July, with an average drop of 150 yuan/ton or more. Among them, the individual coke procurement prices for eastern China's individual steel mills have been reduced by 250-280 yuan/ton this month; the price of coke procurement from a leading steel mill in Northeast China has been reduced by 240 yuan this month to the first-tier metallurgical coke arrival price of 1,600 yuan/ton, with secondary metallurgy. Jiao Jiao station price 1520 yuan / ton. Coking coal prices continued to fall this month, with an average drop of around RMB 100/t. In July, domestic steel prices fell sharply. With the decline in steel prices, steel mills began to consider stopping production and limiting production. In the later period, steel mills will reduce the amount of raw material purchases, maintain low inventory levels, and reduce the purchase price of raw materials. Another coking plant was affected by the decline in coke prices and began to increase production limits. Coking plants in northern and northeastern China began to roil. Demand for coking coal has begun to weaken and domestic coking coal prices are expected to fall next month. After the coke has lost its cost support and the downstream demand has not improved much, it is expected that the domestic coke market will continue to operate weakly in the next month. The low prices in some regions will not rule out the possibility of a rebound, but the overall situation will continue to show a downward trend.