Steel market bullish in early 2013

Although it is approaching the end of the year, due to the restocking of steel mills and traders, the price of imported iron ore has jumped significantly. The staged market highlights brought about by the continuous destocking of the steel industry for the first half of the year. As for the trend of the steel market next year, most insiders said that the current price has been at a relatively low level and will be mildly bullish in the coming year.

After the continued destocking of ore traders and steel mills, China's port iron ore stockpiles have dropped below 8,000 tons. This is relatively low compared to China's current 700 million tons of steel production. Under the demand for replenishment of stocks, imported iron ore has seen a jump in the market.

According to the Platts offer, 62% of the fines have reached a price of 131 US dollars / ton, up 8.75 US dollars / ton from last week. Many market participants said that the increase was unexpected. According to some sources, in the near future, the mineral traders are generally reluctant to sell their goods. In addition, the recent snowfall has caused obstacles to production and transportation, and the supply will be tightened in the future.

When analyzing the phenomenon, analysts said: “In October and November, when crude steel production remained relatively low and stable, there was a rapid decline in imported ore stocks. One reason is that due to the risk of the company, the import has arrived. Not aggressive. Currently, ore has shown a tendency to overstock, and prices have jumped in recent days. This change in ore prices has become a factor in pushing up steel prices in the off-season.”

In addition to iron ore, the steel market has also seen a significant increase in recent days. Thanks to the favorable view from the macro outlook, the billet price rose sharply last weekend. The price of this week's first working date snail and spot market price of steel rose significantly. Among the major varieties, except for galvanized and seamless pipe prices, the price of long slabs has generally risen, with hot rolled coils, narrow strips, and welded pipes rising by more than 1%. In the spot market, merchants cannot hold back price increases, especially in Beijing, Tianjin, and other places. Merchants in Beijing and Tianjin have substantially increased their offers. Individual merchants in the Beijing market are even reluctant to sell goods.

For the industry's most concerned market trends in 2013, a number of industry insiders also maintained a bullish attitude. They believe that the current steel price is already a relatively low level, and the downside is very limited. Coupled with the current low level of steel stocks, with the arrival of the traditional peak demand next year, the market can rise modestly. For gain forecasts, they range from RMB 200/tonne to RMB 700/tonne.