SteelHome Briefing (Feb.17, 2020): Steel Market in East China

I Steel Market Review and Trading Tips

Review

Steel price was comparatively high in most markets in East China with a few transactions. Inquiry about market quotation has increased on the weekend. Market participants were pessimistic about the market development and faced great pressure on fund. Some traders were strongly willingly to sell the products to obtain the fund. Construction steel price decreased by 20-140 yuan per ton; as for flat steel, HRC price dropped by 80-240 yuan per ton, among which price declined by more than 200 yuan per ton in Jinan and Fuzhou markets. Medium plate and CRC price decreased by 30-160 yuan per ton; Section steel price stabilized except for 30 yuan per ton decline in Jinan market.

At present, downstream enterprises have not completely resumed production and terminal demand will not greatly improve in short term. It is suggested to notice the production resumption, inventory and maintenance information in East China later.

SteelHome predicts that steel price will continue to weakly run next week.

Forecast

At present, products supply will be limited as most steel mills in East China reduce or stop production. Besides, most enterprises will gradually resume production next week. However, downstream demand are difficult to quickly recover in next week. And due to the transportation limitation, the transport of raw material and finished products is not effective. Meanwhile, most traders are strongly willing to sell products to obtain the fund back because of the fund pressure. And most market participants are pessimistic about the market development.

Trading Tips

Traders should stay calm and appropriately sell products to obtain the fund back when the inventory is at a high level.

Construction Steel Price in East China Market

Market	Date	Rebar（Φ20mm）	Medium and Heavy Plate（20mm）	HRC（5.75mm）	CRC（1.0mm）	Angle Steel（5#）
Shanghai	2020/2/14	3560	3600	3510	4270	3780
	Change	↓20	↓100	↓90	↓90	-
	Leading Steel Mill/Place of Production	Shente Steel	Pinggang	Rizhao Steel	Wugang	TangshanCai
Zhejiang Hangzhou	2020/2/14	3550	3690	3600	4480	4040
	Change	↓50	↓60	↓120	↓30	-
	Leading Steel Mill/Place of Production	Shagang	Pinggang	Shagang	Wugang	TangshanCai
Jiangsu Nanjing	2020/2/14	3580	3690	3750	4420	3970
	Change	↓120	↓160	↓140	↓100	-
	Leading Steel Mill/Place of Production	Yonggang	Pinggang	Magang	Wugang	Anyang
Anhui Hefei	2020/2/14	3740	3660	3770	4400	3960
	↓70	↓20	↓160	↓180	↓50	-
	Leading Steel Mill/Place of Production	Magang	Pinggang	Magang	Magang	TangshanCai
Shandong Jinan	2020/2/14	3550	3680	3530	4310	3820
	Change	↓100	↓30	↓240	↓40	↓30
	Leading Steel Mill/Place of Production	Yongfeng	Tanggang	China Rainway Group	Hangang	Huanghe Special Steel
JiangXi Nanchang	2020/2/14	3810	3930	3930	4450	4090
	Change	0	0	0	0	0
	Leading Steel Mill/Place of Production	Nanxin Ping	Pinggang	Xingang	Xingang	TangshanCai
Fujian Fuzhou	2020/2/14	3700	3840	3850	4350	4090
	Change	↓110	↓90	↓80	↓100	-
	Leading Steel Mill/Place of Production	Sangang	Sangang	Bengang	Bengang	TangshanCai
Average price	2020/2/14	3612	3722	3648	4365	3947
Average price	Change	↓80	↓93	↓153	↓73	↓4
Forecast before Chinese New Year		0-50	0-30	0-50	0-30	0-30
Forecast in this week		↓10-100	↓10-100	↓10-100	↓10-100	↓10-50

II Trading Volume of Main Products in East China

Trading volume of construction steel and flat steel is comparatively small. SteelHome predicts that trading volume will slightly increase in this week.

Trading Volume of Main Products in East China

(Unit: tonne)

Product	Average volume (Feb, 7-13)	Change%	Average volume in February	Change%
Construction steel	100	-99.33	72.22	-99.72
Medium plate	96	-97.85	165.57	-97.63
HRC	168	-94.91	129.99	-97.4

III Price Change of Main Products in East China (Unit: yuan per tonne)

Product	Rebar (Shagang)	Rebar (Laigang Yongfeng)	Rebar (Magang)	Rebar (Nanjing Steel)	Medium plate (Huawei)	HRC (Rizhao Steel)	Strip (Zenith Steel)
Specification	Φ16-25mm	Φ18-22mm	Φ16-25mm	Φ16-25mm	14-20mm	4.75mm	2.5mm*235
Change	0	↓140	0	↓100	↓200	↓50	0
Current Price	3880	3500	3730	3650	3590	3533	3950
Market Price	3550	3550	3740	3600	3570	3510	3770
Difference	-330	50	10	-50	-20	-23	-180
Leading Market	Hangzhou	Jinan	Hefei	Nanjing	Wuxi	Shanghai	Wuxi
Execution Date	2020/2/11	2020/2/13	2020/2/14	2020/2/14	2020/2/14	2020/2/10	2020/2/10
Note	Ten-day Price	Daily Price	Daily Price	Daily Price	Daily Price	Post-settlement	Ten-day Price
Price Change in Last Week	Daily price was reduced by 0-200 yuan/t and ten-day price was stable
Price Change in this Week (Forecast)	Daily price and ten-day price will decline amid stability.

IV Inventory

Construction Steel

Review

Market inventory and inventory in steel mills greatly increased in East China because of the slow recovery of logistics enterprises and terminal demand. Meanwhile, the increase of rebar inventory is much larger than that of wire rod.

Forecast

Market inventory and inventory in steel mills will continue to increase.

	Shanghai	Hangzhou	Nanjing	Jinan	Hefei	Nanchang	Fuzhou	Market	Steel Mills in East China
Wire Rod	12.3	25.2	5.2	4.9	6.5	9.2	11.8	102.9	64.12
Change	↑1.8	↑2	↑2.1	↑0.7	↑1.84	↑2.8	↑1.8	↑23.06	↑20.6
YoY	↑6.7	↑15	↑3.3	↑3.05	↓0.4	↓0.8	↑2	↑46.15	-
Rebar	46.9	62.5	21.6	8.2	30.8	29.5	18	310.2	217.2
Change	↑3.2	↑5.5	↑5.8	↑1.1	↑16.7	↑5	↑2	↑65.4	↑69.45
YoY	↑14.1	↑11.2	↑2.8	↑4.1	↑22.2	↑8.5	↑5	↑126.1	-

Flat Steel

Review

Market inventory and inventory in steel mills increased in East China market, especially HRC inventory.

Forecast