Analysis of the raw material market of steel November 11, 2021

【Imported Mine】
On the 10th, the black iron ore futures opened lower and moved lower, and the final closing of the 01 iron ore was 536.5, down 4.62%, and the trading volume was 869,500 daily Masukura 3395 lots; the early trading prices of traders were still mainly based on a single discussion, and most of the traders lowered their quotations; Transaction price in Tangshan area: PB powder 600/597 yuan/ton, super special powder 350 yuan/ton, Newman block 715 yuan/ton; Shandong area transaction price: PB powder 600 yuan/ton, super special powder 380 yuan/ton. The spot market for imported ore is operating weakly. Today’s main contract dropped to a minimum of RMB 518.5/ton in the day and continued to set new lows. Traders were still waiting and watching. Some traders were still pessimistic about the market outlook. A certain large company focused on low-price shipments. As for steel mills, procurement is still relatively cautious, with a small amount of on-demand procurement mainly. The supply and demand of iron ore itself continued to be loose, and the port inventory continued to accumulate, combined with the current sharp decline in the price of finished materials, the increase in profit losses of steel mills, and the weaker willingness to purchase, restraining the demand for iron ore. On the whole, it is expected that the iron ore market may be weak and volatile in the short term.

【Coke】
On the 10th, the domestic coke market maintained a weak operation, and steel mills in Shanxi and Hebei have already put forward a third round of price reduction appeals. At present, the mainstream quasi-level wet quenching in Shanxi is reported to be 3660-3760 yuan/ton. In terms of supply, with the recent relaxation of environmental protection and the improvement of the production level of coke companies, the output has been slightly released; downstream procurement has slowed down, and some coke companies have had a backlog of inventories. At present, due to the decline in coke prices, individual coking companies have actively restricted production and have actively restricted production in the short term. Recently, blast furnace operating rate of steel mills has remained low, rigid demand has decreased, steel prices have fallen weakly, steel mills have suffered losses, demand for coke purchases has weakened, and coke prices have continued to be suppressed. The spot coke at the port has fallen, and there are few saleable resources; the cost is upside down and the port volume is small, and traders have a strong wait-and-see sentiment. On the whole, coking companies have increased their shipment pressure and have a pessimistic attitude; steel mills have continued to reduce production, and some have suffered losses, and demand for coke has weakened; at the same time, the cost of coking coal has decreased, and the trend of weak coke prices in the later period is difficult to change.

【Coking Coal】
The coking coal market dropped significantly in 10 years. Affected by the fall in power coal prices, some of the lean and lean coal, lean coal, gas coal and other coal types that were used as power coal in the early stage have followed; under the influence of the slowdown in downstream demand procurement and the increase in pressure on coal mines, low-sulfur main coking coal and other coal types have been in succession Fell sharply. Shanxi Linfen main coking clean coal S0.45G88 will be reduced by RMB 250 to ex-factory price of 3650 yuan/ton, lean coal will be reduced by 100 yuan to ex-factory price of 2,700 yuan/ton; Luliang main coking coal S0.8G85 will be reduced by 300 yuan/ton factory price of 3600 yuan/ton . Some downstream steel mills started the third round of reduction of coke, and the profits of coking enterprises have narrowed. Most of them consume inventory and purchase coking coal relatively cautiously. Regarding imported coking coal, due to the decline in the domestic coking coal market and the weakening of the coking coal market, the quotations of imported coal are chaotic, and there is a downward revision. Customs clearance vehicles at the Mongolian Coal Port remain low, terminal purchases are weak, market transactions are sluggish, and traders’ quotations are weak and stable. The mainstream quotations of Mongolia 5 clean coal are RMB 3050-3100/ton. On the whole, it is expected that the coking coal market may continue to operate weakly in the short term.

【Steel Billet】
On the 10th, billet prices in most domestic cities continued to fall sharply, ranging from 100-250 yuan/ton, and the transaction performance was still weak. As of press time, Tangshan reported 4450 yuan/ton and Jiangyin reported 4250 yuan/ton. The specific market conditions are as follows: the market as a whole follows the broad downward trend of futures in the morning, and the trading atmosphere remains deserted after the drop. In the afternoon, with the release of some good news, futures showed a trend of upward trend. Driven by this, the quotations of steel billet resources in certain cities rebounded slightly, and the mentality of some merchants was also boosted. However, for the market of tomorrow, most merchants said that they still need to wait and see the specific trend of the futures night trading. If it can run, some low-price cities may be cautious and firm. However, once the futures performance continues to be poor, the mentality may be hit again. It maintains a downward trend.

【Scrap Steel】
On the 10th, the scrap market was weak and down, and many steel mills significantly lowered their scrap purchase prices. Among them, Shagang, a mainstream steel mill in East China, once again cut down by 50 yuan/ton, leading many surrounding steel mills to fall by 50-180 yuan/ton. Affected by the sharp drop in billet prices yesterday, scrap prices in North China also declined, and many steel mills Decrease ranging from 50-200 yuan/ton, and a few steel mills temporarily suspended production; many steel mills in southern China experienced 3-4 reductions within a day, with a cumulative decline of 150-200 yuan/ton. At present, heavy waste in the East China market does not include tax at 2960-3050 yuan/ton. Today, the stocks in the finished product period have fallen sharply, the profit of steel mills has further narrowed, and some electric furnace steel mills are already near the profit and loss point. At present, steel mills are willing to suppress scrap prices to control costs, and it is expected that the short-term scrap market will continue to operate weakly.