Sep 04,2019  Steel Knowledge.

Plate later market price will be strong

Although has entered the "Golden Nine", but the plate market still can not get rid of the plight of falling prices. Last week (August 26to, September 1, the same below) the national market price of sheet metal is still in the downward channel. Take The Chinese board as an example, last week, the average market price in North China fell 40 yuan / ton to 80 yuan / ton, the average market price in East China fell 40 yuan / ton to 70 yuan / ton, the central Market, the South China market decline is relatively small, basically 20 yuan / ton to 30 yuan / ton.

Thus, the market price of the sheet does not show the high season steel price should have the appearance.

The reason is that, after the downturn in August, the current market is more dominated by bearish sentiment, coupled with the downstream enterprise procurement enthusiasm significantly reduced, resulting in weak market turnover of the sheet, can not provide effective support for the price rebound.

The author believes that this situation with the arrival of the late consumption season will be improved. On the one hand, the current market inventory is in slow digestion. Industry statistics show that last week, the total inventory of 29 key cities in China reached 1.0502 million tons, a weekly decline of 0.78 million tons, a decrease of 0.74%.

This indicates that the sheet market has moved into destocking ahead of time, which helps to boost market confidence. On the other hand, environmental protection expectations are stronger, and the release of resources in the sheet market is limited. On September 1st, Tangshan City, Hebei Province, issued a draft of the September production limit, which will inhibit the release of production capacity in the market. With the National Day approaching, in order to ensure air quality, it is expected that the future north China and surrounding areas will gradually expand the production limit area, production restrictions will also continue to increase.

According to this forecast, in September the plate market capacity is difficult to release on a large scale, the market supply and demand contradictions will be a certain degree of relief, which will help the plate prices stabilize and rebound.

In addition, in terms of the current major steel mills plate price policy, "flat wait and see" to replace the previous "downward" to become the steel price policy-led, which shows that steel mills on the late market cautious optimism. To sum up, environmental protection expectations to enhance the recovery of superposition terminal demand, it is expected that the late plate market will come out of the downturn, the market price of sheet slabs will be stronger. It should be noted that the release of terminal demand requires a process, if there is no major positive policy stimulus in September, market transactions are still very difficult to see a fundamental change. Market participants should have a clear understanding of this, calm operation is appropriate.

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