From December 3rd to 7th, the domestic steel market price was widely adjusted. Yan Lijuan, general manager of Shanghai Securities Tianjin Sales Department pointed out that from the recent adjustment, the market has basically completed the repair, and the “long board difference” has also shrunk to about 200 yuan/ton, and the bottom of the price has basically recovered to a relatively reasonable range, reaching some markets. The psychological price of people in winter storage. 

At the same time, steel social inventories are already at their lowest level this year and are gradually approaching the same period last year. With the steel price seeking a consolidation, some merchants' replenishment behavior has also eased the inventory pressure of steel mills for more than half a month. On the whole, after the market experienced a big drop, the risks were basically released. In the short term, the market will re-repair expectations, and the steel market may maintain a volatile market in the near future.

The main basis for Yan Lijuan to make the above judgment is:

First, the manufacturing boom has declined, but the structure has continued to improve. The transformation and upgrading of the manufacturing industry continued to advance, and the fundamental role of consumption in promoting economic development continued to play. In November, the equipment manufacturing, high-tech manufacturing and consumer goods manufacturing PMI (Purchasing Managers Index) were 50.5%, 51.7% and 51.6%, respectively, an increase of 0.6, 0.1 and 0.8 percentage points from October, respectively, and higher than manufacturing. The overall level of the industry.

Second, in November, the PMI total index of the steel circulation industry fell. In November 2018, the total PMI index of the steel circulation industry was 44.5, down 5.2 percentage points from October. The survey results show that the sales volume and order volume of steel circulation enterprises in November fell sharply, and the willingness to purchase the market was significantly reduced. It is expected that the demand for steel circulation market will decline in December.

Third, the national steel social stocks fell for eight consecutive weeks. According to the monitoring data, as of December 7, the social inventories of steel in 29 key cities nationwide were 6,866,700 tons, a decrease of 167,900 tons from the previous week, a decrease of 2.39%; the social inventory of construction steel in key cities nationwide was 3,248,900 tons. In the previous week, it decreased by 31,300 tons, down by 0.96%. The social stock of plate in key cities nationwide was 3,361,800 tons, a decrease of 136,600 tons or 3.64% from the previous week.

Fourth, the price of imported iron ore market rebounded slightly last week. According to the monitoring data, as of December 7, the price of 58% grade powder ore imported from Australia was US$60/ton, up by US$1/ton from the previous week; the price of 61.5% grade powder imported from Australia was US$64/ Tons, up $3/ton from the previous week; the price of 62% grade ore from Australia was $94/ton, up $2/ton from the previous week.

Yan Lijuan pointed out that in the heating season, the environmental protection policy became clear, the market's attention returned to the fundamentals from expectations, and gradually shifted from focusing on the supply rhythm to paying attention to the demand rhythm. In November, the domestic steel market fluctuated downwards, steel social inventories continued to decline, but steel mills' inventory pressures increased; the decline in iron ore and coke prices made the support for steel prices in the later period gradually weakened. The steel production release in December is still at a high level, and the market demand is further weakened. It is difficult to effectively improve the supply and demand relationship. It is expected that the domestic steel market will show a volatile adjustment trend in December, and the decline will narrow.