International steel market is expected to rebound moderately in September

Release time：Sep 04, 2019 From：admin

Brief: In August, the global steel market continued to differentiate, and the overall performance was down. The European market, which was affected by both weak demand and pressure from export resources, continued to bottom out in August. In the North American market, after the US steel mills announced the closure of several blast furnaces, they raised the price and pushed up the market. In August, the flat steel prices in the US market began to rise, and the long profile prices and import prices continued to decline. In the Asian market, prices fell in August, and China's domestic steel market fell by 4.7% month-on-month. Looking ahead to September, we expect the global steel market to rebound moderately.

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

1. The European market continues to bottom out.

Continued the pattern of decline in July, European flat steel prices fell again in August. At the end of August, the prices of hot rolled, cold plate and plate in EU steel mills fell by US$10, US$22, US$23 and US$12 respectively, down to US$527, US$616, US$627 and US$621 respectively. The weak economy has led to a recovery in demand for steel in Europe. In addition, strict US steel import controls have also led to the selection of global steel export resources in the European market, so the European steel market is under greater pressure. In order to protect the European steel industry, the EU plans to reduce the annual increase in steel import quotas. EU steel companies say the local steel industry is being threatened by imported products. Therefore, the European Commission proposed to take further measures to prevent US steel and aluminum tariffs from causing a large number of foreign steel products to flood into the European market. In late August, the EU plans to reduce the annual increase in steel import quotas from the original 5% to 3% from October 1. The EU's current steel import quota is based on the annual average import level for the three years from 2015 to 2017. Since then, the import quota will increase by 5% every July 1st. The European Iron and Steel Association (Eurofer) said that imports of finished steel products in the EU increased by 12% in 2018, but the local market grew by only 3.3%. Some analysts said that this may affect Turkey because Turkey has a large share of EU steel imports. The European flat steel market is expected to stabilize in August.

European long product prices fell in August. Rebar prices in EU mills fell slightly by $10 to $549, and nets fell by $57 to $549. The weak demand for long products in Europe is the main reason for the sluggish performance of the long products market. Affected by this, the price of long products in Turkey has been falling due to continued weak demand. In early August, the real-weight FOB reference price for Turkish rebar exports fell from $450-460/tonne last week to $445-455/tonne. Europe is a major exporter of long products in Turkey, as demand is very weak, as buyers hope that prices can be lower. It is expected that the long-term European longs market will continue to be weak.

2, the North American market is mixed

The US flat steel market was mixed in August. In August, the price of US flat steel products rose in August. At the end of July, the prices of hot coil, cold plate and galvanized sheet of US Midwest mills rose by US$29 from last month. $38 and $43, respectively, were $639, $810, and $826, but US plate prices fell by $22 to $783. The US steel import market price has seen a decline of 20-50 US dollars. It can be seen that under the protection of the US steel and aluminum taxation policy, after the price experience fell, the US steel mills regained the market price trend. However, the rise in US steel prices is mainly due to the behavior of steel mills. The support for continued rise in the latter period is insufficient. It is expected that the US flat steel market is expected to stabilize in August.

In August, North American long profile prices fell. The price of threaded and small-sized steel mills in the Midwestern US this month fell by $22 and $39, respectively, to $706 and $667. While US steel trade protection measures continued to push steel prices up in the first half of the year, they also encouraged US steel mills to expand production capacity. According to recent US crude steel production statistics, US steel capacity utilization rate climbed to 80.5%, and output increased by 3.2% over the same period last year. US steel mills began shutting down the blast furnace to cope with market changes. Due to the poor demand in the US construction industry, the price increase of steel mills is mainly in the flat steel market, and the US long products market continues to fall this month. Considering the rising market price of flat steel in the United States, it is expected that the US long profile market will bottom out in September.

3. Asian market decline

In August, Asian flat steel market prices continued to decline. According to the monitoring data of Lange Steel's cloud business platform, China's domestic comprehensive price level in August was 3,980 yuan, a rapid decline of 120 yuan from the previous month, down 4.7% month-on-month. Among them, the price of plate fell by 140 yuan to 4,000 yuan, down 3.3%. In South Korea, the recent sharp drop in prices of key raw materials such as iron ore has created a dilemma for Korean steelmakers eager to raise prices of steel products in the second half of this year. At the end of August, the price of iron ore, one of the main raw materials for steel production, fell to US$85.79/ton, a 30% drop from the high point of US$124.05/ton on July 5, including Posco and Hyundai Steel. Korean steelmakers have been seeking to raise the price of their thick steel plates (key materials for shipbuilding and automotive panels) in the second half of the year to compensate for the losses incurred in the first half of the year due to high raw material costs. The drop in raw material prices has made these steel manufacturers very difficult. Looking ahead to the market, in September, China entered the traditional sales season. After a few months of correction, China's domestic steel market is expected to rebound due to the rebound in demand.

The price of Asian long products fell in August. According to the monitoring data of Lange Steel's cloud business platform, China's domestic long product price level was 3,880 yuan in August, down 240 yuan from July, and down 5.1% month-on-month. India's steel demand is strong. In FY 2019, India imported 3.1 million tons, 1.8 million tons and 1.2 million tons of steel from South Korea, China and Japan respectively. In the same period, steel exports amounted to 8.4 million tons, down 28.2% year-on-year, while imports increased by 6.8. %. According to this budget, it is expected that India will become a net importer of steel after two years, and the Indian market is expected to become the most attractive market for imported resources in Asia. The Asian long products market is expected to rebound slightly in September.

Second, the international steel market stabilized and rebounded in September

Looking ahead to September, we believe that the overall market is expected to stabilize and rebound. As the global market decline continues for some time, the global market is actively intervening and adjusting, such as the US steel mills to reduce production capacity, the EU to strengthen import resource restrictions, etc., which will create conditions for the global steel market to stabilize. In North America, the US steel mill's measures to limit the price increase, although failing to prevent the import market price from falling, the US market price has rebounded significantly, so the US steel market is expected to remain firm in September. The European market has experienced a period of sustained decline. Under the intervention of import resource restrictions in Europe, the European market is expected to stabilize in September, considering the recovery of the international steel market. In the Asian market, China's domestic steel market entered a peak demand season, and it is expected to rebound in September after a sustained decline in the previous period. In summary, we believe that the international steel market is expected to stabilize in September.