steel and materials like ferro silicon prices sored in china

Recently, due to the continuous rise of raw materials, the iron ore futures' daily limit, the price of coke in Shandong continues to rise by 100-120 yuan/ton, and steel mills’ quotations have been raised sharply. According to incomplete statistics, all 44 steel mills have been adjusted upwards by 100-600 yuan/ton. The sharp rise of steel mills led to further strengthening of market quotations.

This round of increase was caused by steel, and gradually expanded to the upstream and downstream markets such as iron ore, coke, ferro silicon, silicon metal, and drove the price increase of many industrial raw materials. The factors behind this include: after poor US employment data and increased easing expectations, the market has further fermented. At the same time, this week will be an important week for Biden to promote the US$2.3 trillion "U.S. Employment Plan." It is possible that the announced inflation data will drive the world. Industrial products rose. The current round of steel price rise is accompanied by a general rise in bulk commodities, and the US further easing expectations are still strengthening. It is understood that Biden will negotiate an infrastructure plan with Republicans on May 13. This will be an important week to promote the US$2.3 trillion "U.S. Jobs Program." The previous poor employment data in the United States also gave the market more room for imagination of the talks. The Fed’s expectations of maintaining easing have strengthened. Commodities ushered in a round of general rises, and steel prices rose accordingly.



From the perspective of China’s domestic market, The National Development and Reform Commission and the Ministry of Industry and Information Technology issued a notice on doing a good job in the “look back” inspection of steel capacity reduction in 2021. The inspection focuses include the exit of production capacity, project construction, the implementation of previous inspections and rectifications, and the reduction of crude steel output in 2021. The question of "carbon peak and carbon neutrality" must be realized. Domestic environmental protection will be stricter, and it is inevitable to limit production capacity. Under the condition of limited production, steel enterprises will focus on promoting the variety of steel, increasing profits and reducing the production capacity of general materials. Promote the conversion of old and new kinetic energy advocated by the country, high-quality development, and adjust the industrial structure; because of the global epidemic, steel production capacity is seriously insufficient, economic development needs to be supported, and various constructions require steel as support. In order to meet demand, only a large amount of foreign steel can be imported. At the moment, Chinese steel companies have sufficient production capacity, low prices, and good performance, and they have snapped up raw materials such as Chinese steel and Ferro Silicon. Since May 2020, China’s export orders have experienced explosive growth, and foreign orders for home appliances, construction vehicles, machinery and equipment, Ferro silicon and other products have been overloaded. The price of steel in my country has always been lower than that in the international market. Steel is exported in large quantities as raw materials, and the added value is relatively low. Since May, the state has intervened through tax and fee adjustments to keep steel in the country for deep processing and re-export to increase added value. Finally, some traders used capital to increase the stock of ferro silicon, coke and other products. , The market was reluctant to sell, and the hype, boosted the price upward.

At present, the futures rebar has exceeded the 6000 mark, the iron ore futures steel daily limit, the spot market has generally increased by more than 100, and the Ferro Silicon Price has risen by more than 800 yuan within a week. Steel mills are supporting strong price increases from the raw material side, and the market is positive. There is no major bearishness at present. Therefore, it is difficult for the current price to change in a trend. It is expected that the steel price will continue to rise in the future.