Week power motivation in increasing price for steel market

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LPR quotations have remained flat for 13 consecutive months. At present, the central bank is still looking into inflationary pressures, and domestic monetary policy remains determined. It continues to adhere to a steady and neutral nature. For bulk commodities, it provides solid support, but steel The overall fundamentals’ upward momentum is not good.

Futures steel prospects, spot ups and downs

The period snails opened higher and lowered. The period snails fell slightly by 38 to close at 5,112, the period rose by 1 to close at 5493, iron ore fell 38.5 to close at 1096.5, coking coal fell 103.5 to close at 1701, and coke fell 106.5 to close at 2371.

In terms of spot, the decline has stabilized: According to data, 8 markets for rebar fell 10-270, and 2 markets rose 90-120. The average price of 20mmHRB400E was 5368 yuan/ton, down 33 yuan/ton from the previous trading day;


7 markets for hot coils fell 10-250, and 7 markets rose 40-120. The average price of 4.75 hot-rolled coils was 5754 yuan/ton, down 2 yuan/ton from the previous trading day;

Six markets in the medium board fell by 20-100, and 9 markets rose by 20-100. The average price of 14-20mm common medium board was 5884 yuan/ton, down 22 yuan/ton from the previous trading day.

Shagang building materials prices are lowered by 300.

On May 21, Shagang released the building materials price policy for late May 2021 based on the price in mid-May 2021:

Steel mills have lowered steel prices, and the impact of policy regulation has gradually emerged, and steel prices have faced greater upward pressure.

Controlled prices at the raw material end

The China Coal Transportation and Marketing Association issued a proposal on doing a good job in ensuring supply and price stability during the peak summer period, stating that since this year, due to multiple factors such as the rise in international bulk commodity prices, the prices of some bulk commodities have continued to rise. As the peak of summer coal consumption is approaching, in order to maintain the stable operation of the economy, we will do a good job in ensuring the supply of coal and stabilizing the price. Following iron ore, coal prices have attracted attention, and the price increase at the raw material end is constrained to be negative for steel prices, and there is insufficient room for steel prices to rise.

The trading volume of building materials has rebounded.

Due to the continuous plunge in steel prices, the market has a mentality of buying up and not buying down. With the wait-and-see sentiment continuously pushing up, the trading volume of building materials this Wednesday dropped to the lowest level since March. With the continuous exploration of futures steel, the spot market transactions are obvious. After the warming up, the demand side will improve to a certain extent to support steel prices.

In summary, steel futures continue to explore upwards, boosting steel prices, but the impact of policy control has gradually emerged. The raw material side has continued to weaken, steel mills have lowered prices, market mentality is unstable, traders bargaining for shipments, and most of them are sold at low prices. Mainly, steel prices are expected to remain stable over the weekend.

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