In December, business in the steel market across the country was in full swing. Foshan, Guangdong, Tianjin, Hebei, Shanghai and Beijing were full of lively and busy scenes. There were long queues of trucks coming to pull and unload. Although the price of steel products has continued to rise overall for more than two months, more customers have come to purchase steel recently than in the past. The Chinese steel market has not entered the peak season in 2020 and has begun to climb the sales peak.

According to the monitoring of the Iron and Steel Association, at the end of November, the China Steel Price Index (CSPI) was 108.17 points, an increase of 3.67% from the previous month. Among them, construction steel played the role of the engine in the rise of steel prices, and the upward momentum was the strongest. Round pipes are rising, angle steel, channel steel, and profiles are rising, and steel plates are rising. Along with the rise in steel prices, the social stock of steel continues to decline. As of December 2, the national social inventory of the five major steel products reached 7.6382 million tons, a record low since the beginning of this year, and has been falling for 7 consecutive weeks.

Why have China's steel prices "Rise" recently?

On the one hand, due to the increase in the price of raw material iron ore, production costs have risen sharply, the profits of steel companies have been squeezed, and the overall price increase is strong, and steel prices have risen sharply.

On the other hand, the weather conditions across the country were relatively good in November. Construction was still underway in some parts of the north, and construction sites in the south were in full rush to deliver as much as possible before the Spring Festival. This caused a concentrated short-term demand for steel. At the same time, in November, some steel mills carried out active seasonal maintenance and passive production reduction under the environmental protection production restriction policy. The output basically maintained a relatively stable range with small fluctuations. After the National Day, the demand did not fall but increased, but the output did not appear to correspond The increase in supply and demand makes a mismatch.

So what are our forecasts for the Chinese steel price market in the next month or even the next quarter?

Since the beginning of October, warehouse inventory has been steadily declining, which indicates strong demand throughout the supply chain.

In view of the enduring strength of end-user demand in China, the scarcity of hot-rolled coil supply in the shipping market, and the continued high and rising iron ore prices, we have substantially raised China's domestic and export flat steel price forecasts. We still predict that prices will peak at the end of the first quarter of 2021, and then will fall for most of the rest of the year. But considering the expected price level at the beginning of 2021, even if there is a decline later this year, the price forecasts for all quarters of 2021 have increased compared to the forecasts released last month.

In view of the current steel price market and the approach of the Chinese New Year, the shipping and domestic shipping prices will also increase accordingly. If you have a purchase demand in the near future, we recommend that you settle it as soon as possible to save various costs, no need to wait and see.

If there is any need for steel pipes, please inquire.

Written by Phebe