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[导读]Since December, driven by factors such as supply shortages caused by declining port shipments abroad, the price of iron ore has skyrocketed, surpassing the 1,000 yuan per ton mark.
Original caption: Iron ore prices surpassed the 1,000 yuan mark, steel companies collectively expressed signs of speculation
Since December, driven by factors such as supply shortages caused by declining port shipments abroad, the price of iron ore has skyrocketed, surpassing the 1,000 yuan / ton mark.
It should be noted that the China Iron and Steel Association recently organized steel companies to hold a symposium on the iron ore market. Participating companies believed that rising iron ore prices had deviated from fundamentals of supply and demand, and there were obvious signs of capital speculation. Many people in the steel industry noted that the sharp rise in iron ore prices has raised production costs for steel companies and weakened their profitability. In order to ease cost pressure, major steel companies recently announced increases in product prices.
Social inventories fell further
Wind data shows that on December 4, the spot price of 62% of iron ore fines reached US $ 145.3 / t, a record in the last eight years; at the same time, the price of the I2105 iron ore futures contract rose to 897.5 on the same day, a record since the price of this product. . On December 10, the spot price of 62% of iron ore fines reached US $ 158.25 / t, equivalent to RMB 1,035 / t at the exchange rate of the day, and the price of the I2105 futures contract rose to 971.0.
According to tracking data from Lange Steel Cloud Business Platform, on December 10, the Platts iron ore price index reached US $ 158.3 / tonne, a new high since February 21, 2013, an increase of 26 US dollars / ton from the end of the previous month, only 10 Daily increase reached 19.7%, an increase of 69.8% from the beginning of the year. Driven by the sharp rise in iron ore prices, the price of rebar futures has skyrocketed, driving up the spot price of rebar. Construction companies are concerned that cost pass-through will further drive market prices up, and their enthusiasm for purchasing has risen significantly, causing construction steel products to appear short-term after demand declines. out of season. Obviously heavy.
Against the backdrop of record commodity prices, many leading steel companies announced increases in product prices. From a sheet materials perspective, the high boom in downstream manufacturing drives strong demand for sheet materials, with cost and demand expected to drive price increases more obviously.
On December 10, Baosteel Co., Ltd. announced the ex-works price for January 2021 and its main products were adjusted upwards compared to December 2020. Among them, hot rolling, general cold, plate , galvanizing and color coating are increased by 400 yuan / ton, 500 yuan / ton, 300 yuan / ton, 500 yuan / ton, and 400 yuan / ton, respectively.
Lange Steel Research Center Wang Guoqing pointed out that Baosteel’s rising ex-factory prices are based on rising costs and continuous improvement of the car and appliance manufacturing industries to drive strong demand for related plates. . Since December, social stocks of steel have fallen further. According to tracking data from Lange Steel Cloud Business Platform, on December 11, the social inventory of 29 key cities calculated by Lange Steel Network was 8.141 million tons, a decrease of 10.5% from the end of the previous month. Among them, the social inventory of construction materials was 4.193 million tons, a decrease of 12.1% compared to the end of the previous month; the social inventory of plates was 3,948 million tons, a decrease of 8.7% compared to the end of the previous month. Judging from the current situation, rising costs are expected to promote the release of storage demand from downstream users, and the social stock of steel is expected to have room for further decline in the subsequent period.
Price increase deviates from fundamentals
On December 10, the China Iron and Steel Industry Association organized the companies Baowu, Shagang, Anshan Iron and Steel, Shougang, Hegang, Valin Steel and other Chinese steel companies to hold a symposium on the mineral market iron to discuss recent market operations and other topics. The companies that participated in the meeting considered that the current rise in iron ore prices has deviated from the fundamentals of supply and demand and has far exceeded the expectations of the mills. There are obvious signs of capital speculation. The iron ore market price mechanism has failed.
The steel companies that participated in the meeting unanimously called on the State Administration of Market Supervision and the China Securities Regulatory Commission to take effective measures to intervene in investigations in a timely manner and severely crack down on possible violations of laws and regulations. The sharp rise in iron ore prices has exceeded industry expectations of price increases. The loss of the steel industry is expected to increase significantly in the subsequent period, which is not conducive to the stability of the industrial chain and the supply chain.
Luo Tiejun, vice president of the China Iron and Steel Association, said in a media interview: “The recent price of imported iron ore has risen sharply beyond industry expectations, and the industry’s operational risks have increased further. From the China Iron and Steel Association situation, the recent price of imported iron ore Strong increase deviates from the fundamentals of supply and demand, the existence of abnormal offers by the traders driving the index up, and the futures market is approaching the month of delivery of long positions and other market tensions that are artificially created. We ask the relevant regulatory authorities to intervene as soon as possible. “
Previously, Dalian Commodity Exchange announced the launch of a “five-in-one” regulatory coordination mechanism for iron ore and other varieties to investigate market violations of laws and regulations. It also stipulates that as of the time of trading on December 7, 2020, non-futures members or clients of the company shall not exceed 10,000 lots in a single day on the I2105 iron ore futures contract. The exchange can adjust the trading limit according to market conditions.
Profitability differentiation of steel companies
Wang Guoqing noted that the severe winter in the north arrived in December and the demand for construction steel is facing a weakening trend. Driven by the recent sharp rise in iron ore prices, the apparent rise in futures snails has led to the short-term release of demand for building materials, and social stocks of steel have fallen further, and the turning point of the social library may be delayed. However, the subsequent weakening in demand for building materials will reappear. In December, the domestic steel market is expected to show a trend of turbulence and differentiation due to differences in demand, and the performance of plates will exceed those of construction materials. From a cost point of view, due to the increase in iron ore and coke prices in November, the cost of steelmakers has increased. The Lange Steel Research Center predicts that the profitability of steelmakers in December will show a divergent trend and the profitability of plates will continue to improve. It may shrink last month.
Wind data shows that as of now, only three publicly traded steel companies, Jinzhou Pipeline, ST Fugang and Youfa Group, have published annual performance forecasts for 2020. The annual performance of the three steel companies in 2020 be happy, but the reasons are different.
Jinzhou Pipeline is expected to achieve a net profit attributable to shareholders of publicly traded companies of 495,895,100 yuan to 633,643,800 yuan in 2020, a year-on-year increase from 80% to 130%. Regarding the main reason for the performance changes, the company stated that Huzhou Jinzhou Company’s assets were taxed by policy and the proceeds from the disposal of large assets were confirmed, resulting in a substantial increase in earnings and non-recurring losses. The profitability of the company’s main business continued to increase.
ST Fugang said that in 2020, the company will adopt “product development structure adjustment, seize the potential, save costs, reduce costs and increase efficiency” as its main business measures to strictly control manufacturing costs. At the same time, through product structure adjustments, orders for high-value-added products continue to grow. The profitability of the company provides strong support.
“Steel companies should take a series of cost-cutting and efficiency-increasing measures to increase profit margins. For example, the procurement of raw materials should consider seasonal factors. At the same time, more advanced technologies should be adopted to increase the utilization of coal. Produce more at that time. Also, improve the sales supply chain and use e-commerce to replace traditional sales companies, agents and other high-cost models, “said Wang Guoqing.
