Steel prices plummeted
18 March 2023
Steel prices plummeted
While the crisis at Silicon Valley Bank in the United States has not fully passed, Credit Suisse has collapsed again. The prices of international commodities are generally falling. Stock and futures markets are also experiencing continuous plunges, and the market's pessimistic sentiment has spread to the black metal chain. The significant decline in European stock markets has dealt a heavy blow to the prices of international metal futures. The domestic commodity futures market is also generally falling. The price of futures steel has dropped by 157, steel prices have fallen by 100, and steel billets have dropped by 50. This has resulted in a complete reversal of the earlier gains.
Among the 24 building materials markets, 22 are falling, with the highest drop being 100 yuan/tonne. Among the 24 hot-rolled coil markets, 23 are falling, with the highest drop being 80 yuan/tonne. Among the 20 medium and thick plate markets, 19 are falling, with the highest drop being 40 yuan/tonne. As there is currently not much inventory pressure, and steel mills have a strong willingness to maintain prices, there is still limited downward space for prices in the short term. Once transactions show signs of a rebound, prices are expected to stabilize.
Recently, China lifted the ban on Australian coal and allowed all domestic companies to import Australian coal, which means the ban on Australian coal since the end of 2020 has ended. According to data, Chinese steel mills and power plants imported 1 million tonnes of Australian coal in the middle of March alone. After stopping the import of Australian coal, there is a shortage of coking coal supply for coastal steel mills in China. Due to transportation issues, the coking coal imported from Mongolia can only meet the demand of western steel mills.
The price trend of steel has been unstable recently. With the recovery of the global capital market and the overall recovery of the Chinese economy after the epidemic, the steel market may be biased towards strong and volatile operations. As steel companies resume work and their profitability gradually improves, this has also played a buffering role for steel companies. If sustained development is to be achieved, it is still necessary to continuously adjust the industrial structure and strengthen the supply chain system. After the rapid decline in steel prices, there is still limited downward space in the short term.
While the crisis at Silicon Valley Bank in the United States has not fully passed, Credit Suisse has collapsed again. The prices of international commodities are generally falling. Stock and futures markets are also experiencing continuous plunges, and the market's pessimistic sentiment has spread to the black metal chain. The significant decline in European stock markets has dealt a heavy blow to the prices of international metal futures. The domestic commodity futures market is also generally falling. The price of futures steel has dropped by 157, steel prices have fallen by 100, and steel billets have dropped by 50. This has resulted in a complete reversal of the earlier gains.
Among the 24 building materials markets, 22 are falling, with the highest drop being 100 yuan/tonne. Among the 24 hot-rolled coil markets, 23 are falling, with the highest drop being 80 yuan/tonne. Among the 20 medium and thick plate markets, 19 are falling, with the highest drop being 40 yuan/tonne. As there is currently not much inventory pressure, and steel mills have a strong willingness to maintain prices, there is still limited downward space for prices in the short term. Once transactions show signs of a rebound, prices are expected to stabilize.
Recently, China lifted the ban on Australian coal and allowed all domestic companies to import Australian coal, which means the ban on Australian coal since the end of 2020 has ended. According to data, Chinese steel mills and power plants imported 1 million tonnes of Australian coal in the middle of March alone. After stopping the import of Australian coal, there is a shortage of coking coal supply for coastal steel mills in China. Due to transportation issues, the coking coal imported from Mongolia can only meet the demand of western steel mills.
The price trend of steel has been unstable recently. With the recovery of the global capital market and the overall recovery of the Chinese economy after the epidemic, the steel market may be biased towards strong and volatile operations. As steel companies resume work and their profitability gradually improves, this has also played a buffering role for steel companies. If sustained development is to be achieved, it is still necessary to continuously adjust the industrial structure and strengthen the supply chain system. After the rapid decline in steel prices, there is still limited downward space in the short term.