Experts say city - January 13

My Steel:In terms of supply, last Friday, the supply of the five major steel varieties was 8.0842 million tons, a decrease of 212,200 tons week-on-week, a drop of 2.6%. Last Friday, the output of the five major steel varieties, except for hot-rolled sheets, decreased week-on-week. In terms of inventory, last Friday, the total inventory of the five major steel varieties was 11.3235 million tons, an increase of 166,100 tons week-on-week, an increase of 1.5%. Last Friday, the total inventory of the five major varieties showed an upward trend week-on-week: the inventory of the five major steel mills, except for hot-rolled sheets and cold-rolled sheets, increased week-on-week, with noticeable increases in rebar and wire rod. The social inventory of the five major varieties increased week-on-week, except for wire rod, with the most significant increase in hot-rolled sheets. In terms of consumption, last Friday, the weekly consumption of the five major varieties was 7.9181 million tons, a decrease of 3.8% month-on-month; among them, the consumption of construction materials decreased by 8.0% month-on-month, and the consumption of plates decreased by 1.6% month-on-month. The apparent consumption of the five major varieties significantly declined last week. The steel market continued to show a dual decline in supply and demand, with the decline in demand expanding. Even with a decrease in output, the accumulation of inventory still increased further, and the trend of weakening consumption before the Spring Festival is relatively certain. Based on past experience, it is expected that the accumulation cycle will last for 2-3 weeks after the Spring Festival. Although various local meetings will be held in January, and the central bank previously mentioned timely reserve requirement ratio cuts and interest rate reductions, the macro level may bring a certain degree of positive signals, but the impact on prices is small before actual implementation. Steel prices will continue to be under pressure before the festival, and attention will be paid to the resumption of work after the festival and the height of inventory accumulation.

Steel Home:Last week, domestic steel market prices continued to decline. First, both CPI and PPI fell month-on-month, with weak consumption on both the residential and enterprise sides; second, the sixth round of price cuts for coke was implemented, and port iron ore inventories remained high, causing the cost center of steel to continue to decline; third, the recent decline in the stock market has also restricted black enterprises. Looking ahead, although merchants' willingness to stock up for winter is low, current steel inventories are basically at the lowest level compared to the same period last year, and inventory pressure is not significant. Key steel enterprises have seen crude steel production decline for three consecutive weeks. Recently, the operating rate of blast furnaces has rebounded, but steel production is likely to be lower than the same period last year. As the Spring Festival approaches, the market will gradually stabilize, and it is expected that domestic steel market prices will stop falling and stabilize this week.

Langge:In 2025, more proactive fiscal policies and moderately loose monetary policies will be implemented. A policy "combination punch" will be struck, further increasing the scale of ultra-long-term special government bond funds, enhancing support, enriching support methods, amplifying leverage effects, and establishing a long-term mechanism for large-scale equipment renewal. With the coordination and effectiveness of policies, China's economy will continue to recover positively. From the perspective of black futures, black iron ore, rebar, and hot-rolled coils barely rose, while "double coke" continued to decline, with coking coal futures dropping more than 1% during the day. Looking at the main rebar contract 05, it closed at 3202, up 1 point for the day, down 70 points for the week, with a weekly settlement price of 3230, down 68 points. The latest open interest is 1.839 million lots, an increase of 164,000 lots compared to last Friday. Last week, short positions actively increased, and the weekly level has broken below the low point of November 2024. The daily K-line shows a bearish arrangement, with six consecutive bearish days. Today's closing barely stayed above the 3200 mark, forming a double doji with the previous day. The next step is to continue to pay attention to the 3200 mark. If this mark cannot be effectively defended, it will put significant pressure on the monthly line, preventing further declines. If it can close above this mark, the decline since January may stabilize, and a rebound may occur at an opportune time. From the perspective of the steel spot market, on the supply side: due to the impact of profit and loss among varieties, the release of production capacity continues to increase, and the output of molten iron has increased, while the output of various products varies. On the demand side: as the seasonal weather impact expands, terminal demand gradually shrinks, and market transactions have decreased, the winter storage game among manufacturers remains evident. On the cost side: due to a slight decline in iron ore prices, a decrease in scrap steel prices, and a drop in coke prices, the support for production costs has begun to weaken. Therefore, the Langge Steel Research Center predicts that (January 13-17, 2025) under the influence of strong expectations for economic policies at the beginning of the year, continuous enhancement of steel supply, significant intensification of winter storage games, and weakening cost support, the domestic steel market may continue to show a weak downward trend.

Tang Song:This week, as more enterprises begin their Spring Festival holidays, many regions are entering the coldest period. Construction projects in the north are halted, and construction projects in the south are wrapping up, with construction companies entering holiday mode, leading to a significant reduction in demand for construction steel. The rapid weakening of market demand has become a reality, with fundamental contradictions in the spot market accumulating quickly. Additionally, the trade market has entered a semi-holiday state, processing enterprises are gradually going on holiday, and the willingness to actively stock up for winter is low, making it difficult for a winter storage market to form, with trade demand gradually stagnating. The replenishment demand from end users has basically been completed, with a reduction in procurement scale, and terminal demand showing a clear weakness. Overall, the degree of weakening in steel demand has accelerated significantly. On the supply side, as the Spring Festival approaches, long-process production lines complete short-term maintenance, and the operating rate will remain relatively stable; most regions' independent electric furnace production lines are concentrated in shutdowns and holidays, leading to a significant decline in short-process operating rates; the output of rolled products remains stable, while the output of rebar has decreased significantly. The supply of steel resources continues to decrease, with winter storage contract resources and northern materials moving south increasing. The market is generally in a clear state of "dual reduction" in supply and demand, with the degree of weakening in demand continuing to accelerate. The social inventory of steel has entered a rapid rising phase, with regional and key varieties showing varying degrees of inventory increases. Following the rapid decline in the prices of black products, the prices of major varieties have now fallen to a stage low, with high price risks basically released. There is still a certain confidence in the market after the Spring Festival, with high expectations for a reduction in supply, and winter storage operations showing some performance, creating conditions to support the market. Currently, the market remains cautious, and winter storage demand has not been fully stimulated. It is expected that in the short term, the market will continue to test each other, repeatedly probing the bottom to find a balance price. Theoretically, if the rebar does not break through 3250, the market will remain in a weak channel. It is expected that the rebar will adjust in the range of 3160-3250.

Youfa Group Han Weidong:In January 2017, the average price of Tangshan strip steel was 3120 yuan, and in December it was 4190 yuan. The price of steel has nothing to do with who is the president of the United States... In that year, there was still rebar steel in the first half of the year, and the last time it was canceled was at the end of June. With all varieties of Tangshan steel mills losing money, the number of steel mills reducing production due to maintenance has recently increased. There are two major risk factors in the market: one is production, and the other is price. These two factors have entered a safe period, but the market has already entered the off-season. The contradiction between supply and demand and valuation is no longer the most important factor in price movement; it is mainly about expectations and capital thoughts. However, for the industry, this year's Spring Festival is relatively the most stable one. The current market will not have trend opportunities or risks; it is generally in a bottom area of oscillation. The reasonable inventory for passive winter storage has at least low risk. Even if there is a decline later, we can exchange time for space. As long as we do not reduce inventory, we can manage!