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China's steel prices is expected to be rebound after the Spring Festival steel plate

"From the current steel material market, we can clearly feel that this year's steel material winter storage market is not ideal." Industry insiders told China Securities Journal reporters. However, from the current situation of the industrial chain, the steel material market will appear a wave of upward market after the Spring Festival, and the increase may exceed 100 yuan.

According to reports, from November to December 2018, due to the market downturn, and the market generally bears the trend of 2019, steel mills are mainly to reduce inventory, and the willingness to start winter storage is low, but with the recovery of the steel market, some steel enterprises are now slightly restored confidence, traders are more cautious.

Cao Ying, an analyst said that the demand for terminal products in the south China is still strong. In addition, steel mills have introduced winter storage policy, which has boosted trade demand slightly, so the overall steel demand performance is still better than expected. However, the start-up of blast furnace is basically low, and the start-up of electric arc furnace is weak, so the accumulative range of steel stock is still not as expected.

In the spot market, steel spot fell slightly last week, with the national average price of thread steel falling by 21 yuan to 4041 yuan/ton and hot rolled steel coils falling by 10 yuan to 3742 yuan/ton. Last week, screw social inventory increased by 9.4%, factory warehouse decreased by 6.6%, hot roll social inventory increased by 3.8%, factory warehouse decreased by 0.2%, and the accumulating range was not as expected. "Shanghai thread steel procurement rose from 25,000 tons to 29,000 tons, and its performance is still stronger than in previous years. The winter storage policy issued successively by steel mills is not too strong, which shows that the inventory pressure of steel mills is not too high. Cao Ying said.

In terms of iron and steel supply, the start-up of blast furnaces in China is still low due to the influence of air. Last week, the start-up of blast furnaces in Tangshan increased by 2.44% to 53.66%, and that in the whole country increased by 0.13% to 64.36%. The utilization rate of blast furnace capacity in China rose from 80.66% to 80.8% last week. Gross profit on thread steel rose from 831 to 920 yuan/ton, gross interest rate was 24.5%, and gross profit on hot rolls rose to 700 yuan/ton.

According to Cao Ying's analysis, in general, poor air quality in winter leads to low start-up of blast furnace, and the addition of steel material leads to a decline in crude steel supply; the demand side is still better than expected, and the rigid demand for winter storage still exists. Therefore, although the contradiction between supply and demand of steel material is not prominent at present, the probability of price fluctuation and rebound is great.

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