In the month of September, China's manufacturing Purchasing Managers' Index (PMI) continued to show an upward trend, signaling a gradual improvement in the macroeconomic environment and a steady rise in downstream demand. However, steel mills are also ramping up their production levels, leading to an increase in social steel stockpiles. This growing supply-demand imbalance is expected to put pressure on steel prices in the coming period. The domestic steel market is anticipated to experience limited price fluctuations this week (October 14–18, 2013).
According to the weekly price forecast model from the Information Research Center, steel prices are expected to remain within a narrow range. The long product market will see similar trends, while the plate market may exhibit minor fluctuations. The national steel price index is projected to hover around 139.6 points, with an average steel price of approximately 3,630 yuan per ton, showing a small fluctuation of about 20 yuan. The long steel price index is expected to fluctuate around 155.9 points, with a slight variation of about 0.1 point, while the plate price index is expected to stay near 120.1 points, also showing minimal changes.
Market research data from the Information Research Center indicates that the domestic long products market will remain stable this week, while the plate market may witness some ups and downs. Raw material prices will also be relatively stable, with iron ore prices expected to rise by 5 yuan, coke prices remaining steady, scrap prices increasing by 20 yuan, and billet prices declining by 20 yuan.
Looking back at Week 41 of 2013 (October 8–11), the national comprehensive steel price index reached 139.5 points, representing a 0.13% increase compared to pre-holiday levels and a 7.48% decrease compared to the same period last year. The Long Product Market Index (LGMI) stood at 155.8 points, up 0.24% from before the holiday, but down 9.12% year-on-year. The Plate Market Index was 120 points, slightly lower than pre-holiday levels by 0.03%, and down 4.80% compared to the same period last year.
In the 41st week of 2013, the market prices of 17 types of steel and iron products showed minor fluctuations. While some varieties saw slight increases, others experienced more significant rises or drops. Specifically, five varieties increased, two decreased, and 21 remained flat. The domestic raw materials market showed a weakening trend, with iron ore, coke, and scrap prices remaining stable, while billet prices fell by 30–40 yuan.
The rebar market faced challenges this week, with a slight recovery after five consecutive weeks of decline. The closing price rose by 14 points, indicating a modest rebound. The main contracts for rebar, such as 1401, held 15.08 million tons, while the 1405 contract saw an increase in positions.
National steel inventories rebounded this week, with social steel stocks rising significantly. The inventory of building materials increased slightly, and slab stocks also grew. As of October 11, total steel inventories in 29 key cities reached 13.7498 million tons, up 21.96 million tons from pre-holiday levels. Wire rod inventories increased by 4.32%, rebar inventories dropped slightly by 0.23%, and hot-rolled coil inventories rose by 2.26%. Cold-rolled coil and plate inventories also saw growth, with cold-rolled coils up 1.63% and plates up 3.65%.
From a macroeconomic perspective, China’s manufacturing PMI for September stood at 51.1%, up 0.1 percentage points from the previous month. Key drivers included new orders, production, and purchases, suggesting a stable economic growth trend. However, the pace of growth has slowed, indicating a cautious outlook for future economic performance.
On the industry front, the steel and mining sector’s PMI dropped to 48.4, entering contraction territory. This reflects weaker demand and reduced market activity. Downstream sectors, including transportation and railways, showed mixed results. August traffic fixed asset investment totaled 186.5 billion yuan, up 3.3% year-on-year, though growth slowed compared to the previous month. Railway investment surged by 12.6% in August, reaching 51.5 billion yuan, while highway investments grew at a slower rate.
Shipbuilding activity declined, with the total completed shipbuilding volume in the first three quarters falling by 26.4% year-on-year. However, new ship orders increased significantly, up 147.1% compared to the same period last year.
Overall, the steel market remains in a state of delicate balance, with limited price movements expected in the short term. Supply pressures continue to grow, while demand remains cautiously optimistic. Investors and traders are advised to monitor market conditions closely as the sector navigates these dynamics.
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