Home > News > Infrastructure investment has warmed up, and price of rebar has gone up. Steel prices or strength again!

Infrastructure investment has warmed up, and price of rebar has gone up. Steel prices or strength again!

The overnight air raid on New York crude oil prices, which plunged by nearly 7%, did not hinder the rise of domestic black commodity futures prices. On November 14, the domestic black department rose sharply. The main 1901 contract of threaded steel of Shanghai Futures Exchange opened at 3850 yuan/ton, which was slightly lower. Then the price went up all the way. The closing price rose 69 yuan/ton, closing at 3937 yuan/ton, an increase of 1.78%. A Zhongyang Line may also give investors good expectations for the continued decline of threaded steel futures, after all, the spot price now hangs back nearly 700 yuan/ton. On the same day, the black series related to screw steel increased, coke rose 1.91%, Zheng coal rose more than 2%. In a slight sweep of the past haze, many investors are most concerned about the trend of course.

On November 14, the National Bureau of Statistics released data showing that crude steel output in October was 82.55 million tons, an increase of 9.1% year-on-year. Although the output of crude steel decreased from the record 8.85 million tons in September, the output of crude steel in January-October was 782.46 million tons, an increase of 6.4% year-on-year. Although the increase in output is not necessarily good for prices, from another set of data released by the National Bureau of Statistics, China's investment in fixed assets increased to 5.7% in January-October, which may highlight that the state's promotion of infrastructure projects has not slowed down, which may be the main driving force behind today's rise.

On November 14, the data released by the Ministry of Industry and Information Technology showed that with the deepening of the supply-side structural reform, the iron and steel industry in the first three quarters of 2018 generally continued to develop well. Four aspects of good development are as follows: first, crude steel output continues to grow; second, steel prices are running at a high level; third, steel exports tend to be stable; and fourth, enterprise benefits continue to improve. According to the published data, the steel composite price index in the first three quarters averaged 116.3 points, up 11.9% year-on-year, and the main business income of the steel industry increased 14% year-on-year. The rebound of steel industry may also show the trend of development in a certain extent.

Spot inversion in the price period of threaded steel is another reason for investors'expectations of the later rise in the price of threaded steel. According to the relevant monitoring data, as of November 13, the average price of threaded steel in the top ten major cities in China was 4538 yuan/ton. Although it dropped 177 yuan/ton from the end of October, the decline of threaded steel futures was even greater. In terms of the threaded 1901 contract on November 13, it dropped as much as 362 yuan/ton from the peak in October. The difference between spot and futures prices is nearly 700 yuan, and this range is still expanding. Although investors are not optimistic about future price expectations, it may also be considered that irrational selling causes the price of futures to fall excessively.

This winter, the output of threaded steel may still be significantly higher than in previous years; banning "one-size-fits-all" environmental protection has enabled many steel enterprises to get more environmental protection convenience, and corresponding supporting measures have been introduced in various places. Peak staggering and unlimited production of environmental benchmarking have become the main coordination measures. A large amount of capacity release, when demand has not been significantly improved, will bring high inventory to a certain extent, or will further suppress the pace of rising steel such as threaded steel. In summary, the spot price of threaded steel will probably be stable in the future, or even fall in stages. If the fundamentals continue to improve, futures prices may rebound to some extent. (source: 100 family number)
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