After the New Year's day in 2018, the domestic steel market continued to decline, especially the construction steel market fell sharply. As of January 10, the average price of the national 20mm rebar was 4,144 yuan/ton, which was down about 310 yuan/ton in early January and 760 yuan/ton in the last month. On the same day, the average price of 4.75mm hot volume in China was 4,248 yuan/ton, and the total price of the hot volume in the past month was about 190 yuan/ton.

Since last November, the building materials market has seen a surge in the heating season. With the increase of the last month, is the bottom of the market proved? How will it work later?
Some regional blast furnaces are reproducing, steel demand continues to shrink and supply and demand are increasing.
Profits in the steel industry have continued to fall due to a correction in the steel market for nearly a month. The author calculates the current tangshan steel rebar steel margin (cost does not include the three costs, depreciation of fixed assets, etc.) of about 650 yuan, production enthusiasm is still in iron and steel enterprise, in succession recently in parts of the blast furnace production.
Beijing-tianjin-hebei heating season, however, still big steel mills have their strength, such as the first week of January tangshan blast furnace capacity utilization is still less than 60%, 163 steel blast furnace capacity utilization by 78.39%, slightly higher than the level in December. Overall, the estimated daily output of crude steel in January was more than 2.1 million tons, slightly higher than last month and a slight increase.
Since mid-december 2017, demand for steel in the lower reaches of China has been shrinking. Rain and snow in winter, demand in advance comprehensive overdraft, pessimistic expectations, and so on factors, in early January 2018, steel market volume is still in decline, the supply and demand contradiction intensified, rising steel inventory every week.
Steel inventory staged recovery, overall level is still lower than in previous years.
According to my iron and steel network monitoring, last week, the steel stocks of steel mills in China were 47.94 million tons, which increased by 3.5 percent on a month-on-month basis, and continued to climb in four weeks, down 14.2 percent from a year ago.
Over the same period, the stock of steel stocks in major cities in the country was 835.1 million tons, which increased by 5.3 percent on a month-on-month basis, and continued to climb for three consecutive weeks, down 15.1 percent from a year ago.
Steel inventories have picked up in recent weeks, mainly in building materials inventories, with more pressure on supply and demand. In addition, we should also note that steel stocks are still at a low level compared with previous years, which is different from the inventory stage of 2012-2015.
The price of the steel plant is higher than that of the merchant, the basic repair of the current base difference, the macroeconomic stabilization, the adjustment of the steel price space or not.
Due to the weak demand for steel in the downstream, the short term steel market is dominated by bearish factors, but after a month of adjustment, there are some positive signals in the market.
First of all, a new round of pricing policy has been issued by mainstream steel mills recently, baosteel 2, and march plate factory price stability. Although mainstream building materials steel mills such as sha steel and zhongtian steel have slashed prices in mid-january, the factory price is significantly higher than the spot market. At present, the factory price of 20mm rebar is 4350 yuan/ton, which is 360 yuan/ton higher than the hangzhou market. The price reduction of mainstream steel mills is obviously lower than the market price, which increases the pressure of the middle dealer operation and the intention of controlling the disorderly fall of the market.
Secondly, the current base repair of the rebar steel period is basically repaired, and the closing price of the main force 1805 of the current rebar steel is 52 yuan/ton compared with that of Shanghai market, and the amount of water in December 2017 is as high as 1000 yuan/ton. There is not a lot of arbitrage space in the period of rebar, and there is not enough incentive for the spot market to deliver goods at a low price.

Third, the global economy is still on the track of recovery, and China's import and export growth is expected to increase in the first quarter of 2018. The domestic economy is stable and the trend continues, and real retail sales continue to pick up. Li keqiang, the premier of the state council, expects GDP to grow by 6.9% in 2017. The bond market, the stock market and the housing market are running smoothly, and the corporate leverage ratio is stable.
In short, in the short term, the downstream steel demand is weak, steel stocks are overstocked, the steel market still has room to adjust. However, with the overhaul of a month, steel industry profits, rebar period is the basis, the spiral roll gap are basic return to a reasonable level, market a fear of heights emotional release obviously, is expected to fall late already. Before the Spring Festival, there is still a rebound in steel prices before the Spring Festival.