There are three reasons for the skyrocketing seamless square tube:
First, the high cost support has become the main reason for the price increase: since October, the domestic coke market has risen strongly, due to the serious shortage of coking coal market, the low raw material inventory of coke production enterprises, and the relatively low level of coke inventory in steel mills. To maintain the normal operation of the blast furnace, it has to be forced to accept price adjustments. Although the National Development and Reform Commission has repeatedly tried to expand the supply of coal in an appropriate amount, the shortage of resources still cannot be alleviated in the short term. Supported the continuous high of coke prices in November and transmitted it to the billet market. The spot resources of billet storage have always remained low, and the amount of circulating resources in the market is still limited. According to statistics from our website on November 1, the current stock of billet in Tangshan Port and mainstream storage is about 306,000 tons, which is only 1/2 of the same period last year. . At present, the overall operating rate of downstream billet rolling mills remains at a normal level, and the supply and demand status of billets continues to be good.
Second, tight goods prices have risen, leading manufacturers’ guidance prices have skyrocketed: The November guidance prices issued by major domestic steel mills such as major profiles, strip steel, hot-rolled, medium and heavy plates, etc. have risen sharply, with an increase of 30-100 Yuan/ton; especially in terms of strip steel and plate, the gains were the first, and market confidence was boosted.
Third, to resolve the overcapacity of seamless rectangular pipes, the expected reduction in the supply of billets is enhanced: According to statistics from our website, the operating rate of the blast furnace of Tangshan Steel Corporation remained at 90%-91% in early October, but has declined significantly since mid-to-late, statistics on the 28th The data fell to 83.03%, taking into account that the current strengthening of environmental protection management has become the norm, the shortage of coal coke supply, rising costs and other factors have gradually revealed the impact on steel mill production. In addition, on the morning of October 29th, Tangshan City held a centralized demolition (storage) action to resolve the excess capacity of seamless rectangular tubes in October, marking that Tangshan has completed the task of solving seamless rectangular tube production capacity in this year’s province on time. After this action, this year, the city has reduced 15 blast furnaces, reduced iron-making capacity of 7.8 million tons, reduced 12 converters, and steel-making capacity of 8.29 million tons. The full-year target was completed on schedule and fulfilled the responsibility of “Tangshan for capacity reduction”. “” the solemn promise, and handed in a satisfactory answer to the provincial party committee, the provincial government and the people of the city. After some manufacturers shut down and partially announced the blast furnace, the overall volume of billets sold out has decreased, making the billets that were already in short supply, apparently more tight, and supporting the rise in billet prices.

fds (1)

Post time: Apr-05-2021