Analysis of the raw material market of steel November 16, 2021

【Imported Mine】
On the 15th, the black iron ore futures were weak and fluctuated. The final closing of the 01 iron ore was 539, down 2.53%, and the trading volume was 814,600 days. 595 yuan/ton, mixed powder 440 yuan/ton, super special powder 380 yuan/ton; transaction price in Shandong area: PB powder 595/600 yuan/ton, Yang Di powder 480/495 yuan/ton. The spot market for imported minerals is weak. The speculative sentiment of traders decreased today, and the market sentiment was weak. Most of them wait and see on Monday. As for steel mills, procurement is still relatively cautious, with a small amount of on-demand procurement mainly. The transaction varieties are mainly concentrated in mainstream low- and medium-grade mines. Iron ore port inventories continue to increase, downstream demand is poor, steel profits continue to shrink, steel mills have increased losses, and iron ore demand is difficult to improve. On the whole, it is expected that the iron ore market may be weak and volatile in the short term.

【Coke】
On the 15th, the domestic coke market still maintained a weak downward trend. With the implementation of coke prices in large steel plants in Hebei, the fourth round of domestic price cuts has basically been completed, with a cumulative price cut of 800 yuan/ton. After the fall, the mainstream quasi-level wet quenching in Shanxi area reported 3460-3560 yuan/ton. Today, a few steel mills in Hebei put forward a fifth round of price reduction appeals. In terms of supply, the current coking companies still have high-priced coking coal resources. The production costs of coking companies are relatively high, and the price of finished products is falling fast. Mainly goods, supply is relatively loose for the time being. Downstream steel mills are still vigorously restricting production, and steel prices have fallen from low levels, steel mills are losing money, demand for coke has shrunk, and more purchases are based on demand. Downstream procurement slowed down, and some coking companies had a backlog of inventory in their factories. Affected by environmental protection, the steel industry in Hebei Province has staggered production during the heating season. Since November 15th, Hebei steel mills have limited production by 30% for a period of 4 months. The production of steel mills continued to limit production, and the demand for coke continued to be sluggish. Affected by the weakening market sentiment, the port transactions have been deserted, and traders have no purchasing plans for the time being, so they tend to maintain a wait-and-see mood. On the whole, steel mills have reduced demand for coke, coke companies have overstocked inventory, slow shipments, and a pessimistic attitude. In the short term, coke prices are still weakly falling. In the later period, we will continue to pay attention to environmental protection policies, steel mill production restrictions, and changes in raw coal prices.

【Coking coal】
On the 15th, the domestic coking coal market continued its weak operation. The supply of coking coal has increased compared with the previous period, the downstream market demand has weakened, coal sales pressure has increased, and the inventory of some coal types in the plant has a small backlog. Recently, the phenomenon of auction flow in mainstream coal mines has increased, and some coal mines are still expected to lower their quotations. Currently, S1 in Luliang area of ​​Shanxi is reduced by 370 yuan/ton to the ex-factory price of 3000 yuan/ton, and fat coal is reduced by 50-100 yuan to the ex-factory price of 3650 yuan/ton; downstream coking companies’ profits have shrunk sharply, with individual losses, and steel mills continue to limit production. Expansion; steel mills and coking plants are less enthusiastic about purchasing coking coal, and the main focus is on the consumption of inventory temporarily. The number of daily customs clearance vehicles at the Mongolian Coal Port has rebounded to around 300 vehicles. However, terminal demand is weak, and short-term freight rates have fallen. Traders are more active in shipping, and the quotations continue to decline. The mainstream price of Mongolian 5 clean coal is around 2500 yuan/ton. On the whole, the coking coal market will continue to operate weakly in the short term under the influence of declining downstream demand and the continued fall in coke prices.

【Steel billet】
On the 15th, domestic billets both rose and fell, ranging from 20-320 yuan/ton, and the transaction performance was generally weak. As of press time, Tangshan rose 20 yuan/ton to 4150 yuan/ton, and Jiangyin dropped 200 yuan/ton to 4250 yuan/ton. Today, most cities in China made up for the decline in the market price last weekend. After the decline, the transaction volume was more on the sidelines, but the low-level firm pattern gradually emerged with the high cost. However, the Tangshan market was affected by the recovery of the basis and the low and heavy volume of some downstream finished products, and the price showed a rebound in the afternoon, with a range of 20 yuan/ton. Guided by this situation, billet prices in other regions are expected to rise slightly tomorrow. In the short-term market, although the current billet demand is still suppressed to a certain extent, with the adjustment of the basis, the current overall cost pressure is greater, and the short-term market is about to be delivered. The reluctance to sell in the market with tight billet resources is gradually increasing, but the overall The steel market environment is weak, so in the short term, the steel billet market may show a trend of low-level shock adjustment.

【Scrap Steel】
On the 15th, the scrap market was weak, and many steel mills significantly lowered their scrap purchase prices. Among them, Shagang, a mainstream steel mill in East China, cuts 50 yuan/ton, some small and medium-sized steel mills fell 30-100 yuan/ton; some steel mills in North China cut 30-200 yuan/ton; northeast and central and southwestern regions are also weak On the downside, many steel mills have reduced the range of 50-800 yuan/ton. At present, heavy waste in the East China market does not include tax at RMB 2,650-2920/ton. Recently, affected by the continuous reduction of scrap prices by steel mills, scrap suppliers have mostly adopted fast-in and fast-out operations, and scrap yards are not enthusiastic about receiving goods, and they mostly focus on clearing inventory. At present, the trend of finished products continues to be weak, spot transactions are not smooth, and steel mills are still willing to keep scrap prices down. The short-term scrap market is expected to run steadily and weakly