Is the Steel Industry Ushering in a Dark Moment?
Recently, steel prices have fallen more than expected, steel mills and traders have fallen into losses one after another, and pessimism has shrouded the entire industry. Wang Haijie, who has more than ten years of experience in the steel industry, has not seen this phenomenon for many years - excess production, declining demand, some traders panic and slashing prices, and the bottom of steel prices continues to move downward.
Since June, the price of steel has continued to fall, and the decline has been rapid, and reached the extreme on June 20. On the same day, the price of rebar futures plummeted, once fell below 4100 points, and closed down for six consecutive trading days, dropping to 4074 yuan / ton, setting a new low price in the past seven months. The spot price of rebar was not spared either. After entering a chaotic sell-off situation at the weekend, the price also dropped by more than 100 yuan per ton on the same day.
Steel prices have reached freezing point, and the losses of steel mills are also deepening. According to the data, on June 23, the gross profit per ton of steel calculated by the two-week raw material inventory of steel mills has lost to about 500 yuan. The last time such a loss occurred was in 2015.
Since 2015, domestic steel prices have experienced a rare plunge. Unfavorable factors such as sluggish downstream demand in the off-season, tight market funds, declining export orders, and falling commodity prices in the international market broke out in a concentrated manner. Panic spread among steel mills and traders, and they sold their inventories regardless of cost, causing domestic steel prices to plummet in January. The price of rebar fell by more than 300 yuan / ton in a single month, and the monthly decline of hot rolled coil reached 500 yuan / ton. As of January 30 of that year, steel prices fell by more than 10% month-on-month and more than 27% year-on-year.
Since June, the price of steel has continued to fall, and the decline has been rapid, and reached the extreme on June 20. On the same day, the price of rebar futures plummeted, once fell below 4100 points, and closed down for six consecutive trading days, dropping to 4074 yuan / ton, setting a new low price in the past seven months. The spot price of rebar was not spared either. After entering a chaotic sell-off situation at the weekend, the price also dropped by more than 100 yuan per ton on the same day.
Steel prices have reached freezing point, and the losses of steel mills are also deepening. According to the data, on June 23, the gross profit per ton of steel calculated by the two-week raw material inventory of steel mills has lost to about 500 yuan. The last time such a loss occurred was in 2015.
Since 2015, domestic steel prices have experienced a rare plunge. Unfavorable factors such as sluggish downstream demand in the off-season, tight market funds, declining export orders, and falling commodity prices in the international market broke out in a concentrated manner. Panic spread among steel mills and traders, and they sold their inventories regardless of cost, causing domestic steel prices to plummet in January. The price of rebar fell by more than 300 yuan / ton in a single month, and the monthly decline of hot rolled coil reached 500 yuan / ton. As of January 30 of that year, steel prices fell by more than 10% month-on-month and more than 27% year-on-year.
