The international steel market was basically stable in May.

Release time：Jul 08, 2019 From：min

Brief: In April, the global steel market continued to operate in a differentiated manner. The European market continued to fluctuate this month, but overall, with the temperature rising and the buyer returning to the market and the EU's temporary trade protection policy, the European steel market remained stable. The North American market continued to show mixed prices this month, but it showed signs of fatigue. The price increase of the previous steel mills was not accepted by the market. It is expected that the market will need further adjustment. In the Asian market, China's domestic market continued to rise, production and strong demand continued to rise, and demand growth in India remained strong. The global steel market is expected to be mixed in May, but the overall situation remains stable.

Characteristics and Analysis of Global Regional Market Operation in January and April

1. The European market fluctuates upward

After the turbulent operation in March, the European market continued to maintain a volatile operation pattern in April, but overall it showed an upward trend. At the end of April, the prices of hot rolled, cold plate and plate in EU steel mills rose by US$23, US$12 and US$25 respectively, up to US$548, US$644 and US$644 respectively. The price of European hot-dip galvanized sheet fell 23 The dollar fell to $649. The decline in the previous price laid the foundation for the recovery of flat steel prices in Europe. In addition, the EU's export quota system also encouraged the European steel market, so the European market as a whole rose. However, the recovery of the market in Europe is not ideal. The recovery of the European market will be a long process, but the space to continue to fall is not big. In Russia, the export slab prices in the CIS region fell in April due to the decline in procurement activities. It is expected that the European market as a whole will continue to fluctuate and continue to operate as a whole.

In April, the price of long products in Europe stopped falling. The rebar and wire rod prices of EU mills rose by $35 and $17, respectively, to $593 and $610, respectively. After experiencing the previous decline, the European longs market has seen an expected rebound. In Turkey, domestic and export prices of Turkish billet remained stable due to stable demand, while import prices fell as a result of low quotations from CIS sellers (CIS). In late April, CIS suppliers slightly lowered their offer to attract buyers from their main export destination countries. The CFR offer from the CIS mill to Turkish buyers has dropped slightly from $445-450/tonne to $440-450/tonne. The CFR inquiry price for Turkish billet importers is at $435/ton or even lower. However, due to the strong support of scrap high-cost billet prices, Turkish steel mills could not lower their prices, and Turkish exports and domestic billet prices remained stable. It is expected that the European longs market will gradually increase in the later period.

2. The North American market is weak

The North American flat steel market continued to show a pattern of differentiation this month, with various varieties varying. At the end of April, the price of hot rolled coils in the Midwestern US steel mills fell by $4 from last month to $760, and the price of cold plates rose by $11 from last month to $926. The galvanized sheet was flat with the previous month and stabilized at US$926. The price of the heavy plate dropped significantly, down by US$33 from the previous month to US$1014. The US steel trade protection policy once pushed the US steel price to a new high in global history. The excessive price will surely ushered in adjustment. At present, the US steel price is lacking in demand. It is expected that the US flat steel price will be adjusted moderately in May. .

In April, North American long product prices fell slightly. The price of threaded and small-sized steel mills in the Midwestern United States remained stable this month, stabilizing at $793 and $834 respectively, and wire prices fell by $11 to $837. The demand for real estate and infrastructure in the United States is relatively stable, so the price of long profile is much smaller than that of flat steel. In addition, since the United States has imposed strict trade protection policies on the long profile market many years ago, the Trump administration’s steel tariffs are not correct. The US long profile market has had a dramatic impact. It is expected that the US long product market will be dominated by smooth operation in May.

3. Asian markets continue to rise

In April, the Asian flat steel market dominated by China continued to rise. According to the monitoring data of the Lange Steel Cloud Business Platform, the comprehensive domestic price level in China was 4,310 yuan in April, up by 120 yuan from the previous month and up 3% month-on-month. Which plate material price last month rose 100 yuan, rose to 4,280 yuan, up 2.5%. The Chinese market is still showing a steady upward trend. Capacity constraints and strong demand are the basis for China's domestic steel market to continue to rise steadily after encountering global steel trade barriers. In India, the performance of the steel industry in FY 2019 still deserves special attention. India's 106.4 million tons of crude steel production makes it surpass Japan and become the world's second largest crude steel producer. In FY 2019, the apparent consumption of finished steel in India reached 97.5 million tons, with an annual growth rate of 7.5%, ranking among the top steel consumers in the world and close to the US consumption level. The country is very likely to become the world's second largest steel consumer by the end of 2019. In addition, rising prices of raw materials such as iron ore also support the Asian steel market. In South Korea, Posco expects iron ore and coal prices to continue to rise in the future, thereby squeezing the profit margins of steel producers, and Posco expects to have an ore price of $82-87 for the rest of the fiscal year. / ton around. Coking coal is another major steelmaking raw material exported by Australia. Due to the maintenance and repair of Queensland Port, it affects coking coal supply. Posco is expected to maintain its trading price at US$190/ton by June 30 this year. Posco announced that operating profit in the first quarter fell 19% year-on-year due to the impact of rising raw material costs. Overall, the Chinese market has supported the Asian market to remain strong. It is expected that the Asian flat steel market price will continue to rise in May.

In February and May, the international steel market was basically stable.Asian long product prices continued to rise in April. According to the monitoring data of Lange Steel's cloud business platform, China's domestic long product price level was 4,280 yuan in April, up 190 yuan from March, and quickly rose 4.7% month-on-month. The Sino-US trade war continues to ferment in the steel sector. This month, the United States announced that many Chinese steel truck hubs levy high anti-dumping duties. The US International Trade Commission has investigated that steel wheel hubs imported from China have caused substance to relevant domestic producers in the United States. Damage, a high-value tariff of five years will be imposed on these imported products. The US Department of Commerce has previously ruled that these imported Chinese wheels are suspected of dumping and enjoying unfair subsidies. Before the US International Trade Commission made the above decision, the US Department of Commerce ruled in March this year that it would impose a 321% anti-dumping duty and a 457% countervailing duty on all Chinese steel wheel manufacturers. The ruling is aimed at 22.5-inch and 24.5-inch Chinese-made steel wheels, which are mainly used for medium and large trucks and other commercial vehicles. In 2017, the total import value of such wheel products in the United States reached 388 million US dollars. Given China's policy of restricting production and strong demand, the US trade protection policy will not have a serious impact on the Chinese market. The Asian long products market is expected to continue to rise steadily in May.

Looking ahead to May, we believe that the performance of various regional markets will be mixed, and the overall performance will be stable. In the North American market, the steel trade protection policy has a limited boost to the market, so the North American market is expected to fluctuate in May. In the European market, as temperatures rise and the buyer's market returns to the market, the transaction will become more active and the European market is expected to remain stable in May. In the Asian market, the de-capacity of China's domestic market has formed favorable support for the market. In addition, with the active construction activities, market demand is expected to further expand, so the Chinese market is expected to continue to rise. In summary, we believe that the international steel market will be divided and operated in May, and the overall performance will be stable.