The surge in steel prices set off a chain reaction

In the industrial travails, steel industry is anxiously waiting for the steel city cooling.

In the context of global inflation, superimposed on domestic pressure after the fall of production capacity policy orientation, steel prices at a historic high to pull up again, the rise is fierce people have no alternative.

The fierce pull up of steel prices has also doubled the pressure of downstream enterprises, originally weak profit margins by further backlog, downstream processing and manufacturing industry in the industrial pain waiting for the steel city to cool.

Traders raised their prices sharply

Recently has maintained a rising trend of steel prices, today again sharply up, a record high is no longer news.

May 10 morning, futures market steel prices continue to explore the highest point in history;
By the end of the afternoon, domestic rebar futures 2110 contract surged 340 yuan/ton, easily over 6000 yuan/ton mark, rose to the high of 6012 yuan/ton, up 5.99%;
Hot rolled coil set a new high after setting a new record on May 8, rising by 358 yuan/ton to a high of 6,335 yuan/ton, an increase of 5.99%.

Spot market, domestic steel prices continue to soar.
Lange steel cloud business platform monitoring data show that the Beijing market rebar price has risen to 6300 yuan/ton, an increase of 500 yuan/ton;
Hangzhou market, Xi 'an market increase are more than 300 yuan/ton, mainstream resources offer reached 6000 yuan/ton;
The average price of 25mm three-level rebar steel in the top ten key cities in China has reached 6066 yuan/ton, up 374 yuan/ton compared with the last trading day.

This year after the May Day, domestic steel spot and futures prices have ushered in a violent rise for several days;
Including hot rolled coil, thick plate, galvanized pipe, billet and other steel prices have reached hundreds of yuan per ton, so that the market was taken by surprise, some traders because of the capital accounted for a large increase and only accept cash shipments, and even several times the price of the suspension and the steel plant plan to stop the situation.

Open source Lai Fuyang securities analyst pointed out that last week, rebar and hot rolled plate of apparent demand has a different degree of fall, but this is a major holiday factor, market volume is still in the high level, the peak season demand strong overall, but the recent price rise considerably more is the emotional level.

In the case of optimistic expectations, traders take the initiative to substantially raise prices in the holiday, the accumulation of spot gains after the holiday boost futures prices, and the strength of futures will further stimulate the spot prices to go higher.

Downstream corporate earnings are worrying

The steel industry is one of the important raw material industries in China. Real estate, automobiles, home appliances, machinery, shipbuilding and elevators are the important downstream industries of the steel industry, which are also greatly affected by the changes in steel prices.

Since the first quarter of this year, steel mills profit per ton of steel has exceeded 1,000 yuan, iron ore prices soaring, domestic steel mills can still maintain a high level of profitability, but downstream enterprises are not so lucky.

Insiders point out that large enterprises with brand advantages can also transfer the pressure brought by rising costs through product price increases, while small enterprises are difficult to transmit the pressure of rising costs due to weak bargaining power;
And different industries to take different order patterns, also let its steel price treatment is different.

For the home appliance industry, since the first quarter of the price of copper, steel and other basic raw materials, as well as the shortage of chip supply, has brought a wave of price increases for the home appliance industry, the increase is generally more than 10%;
Now raw material prices continue to rise, home appliance enterprises in the second half of the export orders difficult to profit or even loss, enterprises are less willing to accept orders.

For the shipbuilding industry, insiders said that the order cycle of its new ships is generally 1-2 years, and the prices undertaken the year before last and last year are calculated according to the cost agreed price of the ship plate at that time. At present, the price of the ship plate has increased by about 50% compared with the price when receiving the order. There are large losses in the early orders, and the purchase intention of raw materials is cautious.

An insider of a state-owned construction company told the 21st Century Business Herald that the company purchases steel in accordance with the benchmark price regularly adjusted by the National Development and Reform Commission. When the market price changes by more than a certain percentage, the company will directly apply for price compensation from the owner, so the cost of raw materials can be passed on more smoothly.

"But the rising price of basic raw materials is bound to lead to higher construction costs, which will affect the future trend of house prices."
"The insider said.

Downstream frequency back order, breach of contract

Ge Xin, deputy director of the research center of Lange Iron & Steel Network, told 21st Century Business Herald that raw material prices are now significantly higher than those of downstream manufacturers when they accept orders. In order to avoid bigger losses, some manufacturers can only choose to cancel orders, break contracts and pay penalty.

Ge Xin said that it is very difficult for consumer goods to raise prices significantly, and the cost pressure cannot be transmitted through price adjustment, and the profit space of some manufacturers is further overloaded.
Recently, the relevant departments have issued a number of policies to reduce the pressure brought about by the rising costs of the manufacturing industry, but the current round of commodity price rises is very strong, and it is difficult to be effectively controlled in the short term.

For household appliances, machinery, elevators and other industries, many entrepreneurs told reporters, such as steel production materials prices rose sharply, lead to enterprise purchase cost is too high, most companies have in does not affect the normal production materials as little as possible under the premise of purchasing steel, expect steel prices fall back again after the goods, on the sidelines will strong.

In addition, as steel prices continue to jump, the pressure of downstream steel processing enterprises gradually increased.

The person in charge of Tangshan Fuhaixin Co., Ltd. told reporters that the company was in a state of production suspension due to the environmental protection limit and Tangshan local billet supply shortage.
However, due to the large price increase of billet, the acceptance degree of the lower reaches of the price is declining, the processing end of the company basically has no profit, the impact of production is not too big.

Ge Xin pointed out that because some manufacturing enterprises have reduced the amount of steel stock waiting for steel prices to return to rational, so the social plate inventory has begun to slowly rise;
With the adjustment of the steel import and export tax rebate policy, the steel market is expected to return to a rational state in the second half of the year, but will remain strong in the short term.