At the end of December, the domestic steel raw materials market experienced fluctuations, with some prices rising significantly. According to Luo Baihui, the imported iron ore spot market is expected to continue its upward trend in the near future. Meanwhile, the local iron ore fines market remains mixed, while the steel billet market is undergoing a weak consolidation. The coke market shows steady growth, and the shipping market remains sluggish.
The imported iron ore market continued its upward movement, with external market prices surging and domestic port spot prices also rising. Some markets saw significant increases. Currently, the supply of resources is limited, and as the Chinese New Year holiday approaches, market participants are hesitant to sell, leading to normal transaction levels.
Crude steel output decreased slightly on a month-on-month basis. The pace of steel production capacity release has remained controlled, with average daily crude steel output declining slightly in the last ten days. According to data from the China Iron and Steel Association, the national average daily crude steel output in mid-December was 1.9109 million tons, down 34,100 tons or 1.76% compared to 1.945 million tons in the first half of December. For key steel companies, the average daily output was 1.6233 million tons, a decrease of 33,600 tons or 2.03% from 1.6569 million tons in the first quarter of December.
Despite entering the traditional off-season, steel sales remained strong, especially in the fourth quarter. Mid-December data showed that the average daily steel sales of 76 key steel enterprises reached 1,177.4 tons, up 5.75% year-on-year from 1,295,900 tons in mid-November. Long product sales rose by 4.96%, reaching 6,877,500 tons, while strip sales increased by 4.39% to 5,840,100 tons.
Steel inventory for key steel companies rebounded to nearly two-month highs, reaching 10.86 million tons—the highest level since late October. Over the past ten days, steel stock increased by 526,600 tons or 5.1%, equivalent to 6.75 days of daily sales, up from 6.59 days at the start of December. However, this remains below the 12-year average of 8.76 days.
The ex-factory price of steel rose by 2.43%. The average selling price of 76 key steel enterprises reached 4,177 yuan/ton, up 99 yuan/ton or 2.43% from 4,078 yuan/ton in mid-December. Long product prices rose 0.55% to 3,909 yuan/ton, while plate prices climbed 3.14% to 4,347 yuan/ton. Pipe prices remained stable at 5,066 yuan/ton.
Domestic iron concentrate markets showed mixed performance, with most areas stable and some regions experiencing price fluctuations. Some steel mills raised procurement prices for iron ore. In Tangshan, billet prices softened slightly, while some iron concentrate markets saw weak consolidation and reduced trading activity.
The domestic steel billet market is in a weak consolidation phase, with some areas seeing price declines of 30–40 yuan/ton. In Tangshan, billet prices dropped by 70 yuan/ton in the morning and 20 yuan/ton in the afternoon. Although market sentiment improved, buyers remained cautious, resulting in lower transaction volumes.
The domestic coke market saw a steady rise, with prices increasing by 15–80 yuan/ton. Some steel mills raised their purchase prices by 20–50 yuan/ton. With slight recovery in the steel market and good downstream demand, coke supply tightened, and transactions improved, pushing prices higher.
The scrap market remained stable, with some areas seeing price increases of 30–50 yuan/ton. Some steel mills raised their scrap purchase prices by 60 yuan/ton. However, due to weak rebar sales and the off-season, trader sentiment cooled, and market activity remained cautious.
In the pig iron market, prices in some regions rose by 50 yuan/ton. Despite a slight correction in Tangshan billet prices, iron and steel makers remained cautious. Market circulation resources were still tight, but transaction levels remained strong, with inventories falling sharply.
In the shipping sector, the market remained weak on December 27th, with many ships idle due to slower raw material imports around Christmas. Freight rates from Brazil to China dropped to $16.268/ton, down $0.701/ton this week. From Western Australia to China, freight rates fell to $7.028/ton, down $1.236/ton. The BDI index stood at 699 points, down 67 points for the week.
**Investment Strategy:** Steel mill production capacity release remains controlled, and off-season steel sales data have been strong. Supply and demand imbalances have eased, and steel prices have rebounded. Additionally, key steel company inventories rose to nearly two-month highs, and social steel stocks increased by 50,000 tons to 11.77 million tons this week. We maintain our previous view that industry fundamentals are gradually improving, and steel prices still have room for further growth.
Taizhou TS HARDWARE Co., Ltd , https://www.shuwengroup.com