Forging processing cannot replace cutting processing

In the context of the global market downturn, Baoshan Iron and Steel Co., Ltd. (Baosteel Co., Ltd. (600019, 600019), known as the benchmark for China's steel prices, opened a flat offer for the November steel ex-factory price.

On October 12, the November steel ex-factory price data released by Baosteel Co., Ltd. showed that the prices of most products remained unchanged compared with the previous month, and only electrical steel products showed a certain degree of decline.

So far, Baosteel's trend of slight increase in ex-factory prices in the past two months has ended.

Iron ore enters the price cut channel

Hu Yanping, an analyst at China United Steel, said that the market had expected Baosteel to lower the price of hot-rolled products. The latest price adjustments prove that Baosteel's orders are not too miserable, which is in line with the recovery of the automobile industry.

Although Baosteel, which focuses on high-end steel products, chooses flat, Hu Yanping still believes that other leading steel mills such as Anshan Iron and Steel (000898) and Wuhan Iron and Steel (600005, shares) (600005) will be adjusted downwards for their ex-factory prices in November. Tune.

When Hu Yanping made the above judgment, the price of iron ore, the main raw material of steel, was entering a downward channel. According to the iron ore price index released by the China Iron and Steel Association on the 11th, in the first week of October, the average CIF price of imported iron ore was US$176.22/ton, a decrease of RMB 0.26/ton from the last week of September. Nishimoto Shinkansen Steel analyst Qiu Yuecheng said that iron ore prices are making up for the decline and are expected to enter a downward channel.

Qiu Yuecheng analyzed that due to the serious losses of steel mills, most of them have reduced the purchase of iron ore raw materials, and the current port inventory is at a high level. In the later stage, the steel mills will accelerate the use of the high-priced ore inventory in the early stage, and then their iron ore costs will be reduced. It has a negative impact on steel prices.

Worrying about the global steel industry?

At the global level, due to concerns about the US and European government debt and the euro zone crisis, investors' anxiety about the global economic situation is spreading, and its impact is spreading to the steel industry. Global steel buyers have postponed orders, and steel companies have begun to prepare to deal with the decline in product prices.

Bruno Ballfer, chairman of Duferco, the world’s largest steel trading company, previously told the Financial Times that buyers believed that prices might fall further, so they refused to sell. Prices are at catastrophic levels.

Steel prices have not improved, but steel production may recover.

In China, on October 11, the China Iron and Steel Association released statistics saying that in late September, the daily crude steel output of China Steel Association member companies was 1.6397 million tons, an increase of 0.61% over mid-September. Based on this estimate, the daily output of crude steel for the whole month of September increased by 2.24% compared with August.

Qiu Yuecheng said that although the domestic steel market prices fell across the board in September, the steel mills still maintained a relatively high level of production enthusiasm in order to consume the high-priced raw material inventory in the early stage. In the short term, after the National Day, with the increase in inventories, domestic plate and building materials companies have increased overhauls. Crude steel production in October may drop slightly from the previous month.

At the same time. The International Iron and Steel Association issued a cautiously optimistic forecast on the 12th: As developing economies continue to drive economic growth, global steel demand this year and next year will increase by approximately 6.5% and 5.4%, respectively.

Zhang Xiaogang takes charge of the International Steel Association

It is also learned that the 45th annual meeting of the International Iron and Steel Association was held in Paris on the same day. Zhang Xiaogang, general manager of China Anshan Iron and Steel Group Corporation, was elected as the new chairman of the association for a one-year term. Zhang Xiaogang thus became the first head of a steel company in mainland China to hold this position.

Worldsteel is headquartered in Brussels, and its members cover 170 steel manufacturing companies worldwide. According to the association, its members account for about 85% of the world’s crude steel production.

The Financial Times said that although this position is only a part-time job, Zhang Xiaogang will represent the global steel industry in some activities, such as negotiations with the government on steel mills’ efforts to reduce carbon emissions. The latest appointment highlights China's growing influence in the global steel industry.

According to data from IHS Global Vision, in terms of output, China has become the world's largest steel producer last year, ending the 100-year dominance of the United States.