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Domestic steel prices fell in the previous period, and the high level of consolidation caused the merchants to suffer.
From the "high-level consolidation" to the differentiation between varieties, and then to the general decline in prices, the domestic steel spot market has experienced a "small trilogy." According to the latest market report provided by the well-known steel information agency “My Steelâ€, the high level of consolidation in the previous period has made the “suffering†of the business, and the substantial decline in steel prices may have some benefits for “out of riskâ€. According to institutional monitoring, the “differentiation market†among domestic steel market varieties has been temporarily suspended. In the most recent week, prices have turned to a consistent decline in both sheet and construction steel. According to feedback from people in the market, the current large-scale precipitation in China has greatly inhibited the turnover of the steel market. The terminal demand is not good, and the purchasing intention of downstream users is generally not strong. In addition, the recent performance of the domestic financial market and steel forward prices were generally poor, and the low-level shocks caused the merchants in the spot steel market to fall back to the expectations of the market outlook, and the mentality turned weak. Driven by the downward adjustment of ex-factory prices by steel mills, spot steel prices have continued to fall. According to analysis, the domestic construction steel market has been lower all the way, the price of East China has fallen by a large margin, and the price of some markets has dropped by about 100 yuan. The main reason is still affected by the weak demand, coupled with the recent rains, the market turnover is relatively light. Market stocks in the South are still low, but they do not support the overall price. At present, the merchants in the spot steel market are reluctant to place orders, and they are basically waiting to see what changes will happen in the next step. The market price of hot rolled coils showed a weak downward trend and the turnover was not good. After Baosteel announced the price cut, Angang also lowered the price of hot rolled products in July by 80 yuan, and WISCO lowered 100 yuan. The pricing policy of the leading steel mills reflects its expectations for the market outlook. Coupled with the actual downturn in the spot market, the risk of downturns in the hot-rolled market has increased significantly. In addition, the price of electronic discs has also been falling continuously in the near future. Taking the Shanghai market as an example, the hot-rolling price of electronic discs has been lower than the spot price by nearly 100 yuan per ton, which reflects the current market's strong sentiment towards the market outlook, market confidence. Lack of it, it is difficult to recover in the short term. The cold rolling market fluctuated downwards, and the decline in some areas was large. The transaction continued to be sluggish, and the business mentality was more pessimistic. Like Baosteel, Angang, Shougang and WISCO also generally lowered the pricing of cold-rolled products in July, and the “cost support†of the steel market weakened. According to some merchants, the current cost of capital is relatively high, and the willingness of merchants to sell goods is not strong. In the case of sluggish demand, the choice of low-cost dumping is not ruled out. At present, the prosperity of the downstream cold-rolling steel industry such as domestic automobiles and home appliances has dropped significantly, and the demand in the cold-rolling market is difficult to improve in the short term. Relevant industry insiders believe that some time ago, the domestic steel market continued to consolidate at a high level, and the ex-factory price and spot price of steel mills were in an upside down state for a long time. Many traders had almost zero profit margin, plus business management costs and capital costs. There is an upward trend, and these traders can be described as "sorrowful." From a certain point of view, the current steel price has a "substantial decline", and it is not necessarily a bad thing for "exhaustion of steel market risk", which is conducive to further adjustment of the steel industry.