SHANGHAI, Feb 16 (SMM) -
Macro：
China
Central Bank: Dynamically monitors and analyses the marginal changes of the real estate market and implements the differentiated housing credit policy according to the various situations
Central Bank: Accelerate the improvement of the legal system and basic systems of the financial market and promote the two-way opening of the financial market in an orderly manner
Overseas
Russia-Ukraine Conflict continues, NATO says it will increase the supply of weapons to Ukraine
UN: Experts say US sanctions on Iran are illegal
Raw materials:
Iron ore
Yesterday, iron ore futures fluctuated upward. The most-traded I2305 contract closed at 865.5 yuan/mt and rose 2.18%. The overall transactions were acceptable. Steel mills purchased on rigid demand, pushing up the spot trading. Prices of PB fines in Shandong moved between 875-880 yuan/mt, up 6-20 yuan/mt from the previous trading day, and those of PB fines in Tangshan were 884-888 yuan/mt, up 4-8 yuan/mt.
The US CPI data exceeded market expectations, but the recovery of domestic downstream was still slow. According to SMM survey, As of February 16, the average operating rate of blast furnaces was 92.12%, up 0.45% from the previous period. The average blast furnace capacity utilisation rate added 0.6% to 93.05%. Due to the production resumption of blast furnaces one after another, the average daily pig iron output grew, which continued to consume iron ore stocks held by steel mills. The current iron ore prices are supported by the fundamentals, and the downward space is relatively limited. In the short term, the iron ore prices will mainly fluctuate.
Coke
On February 15, the traded price of quasi-first grade metallurgical coke (coke dry quenching) in Lvliang city, Shanxi province was 2,890 yuan/mt (ex-factory), flat from the previous trading day.
Coking coal
Downstream companies purchased on demand, weighing on the shipment of some coal mines. The market sentiment has weakened, and prices of some high-priced coals have been lowered.
Coke
On the supply side, the cost of coke companies has decreased recently, slightly pushing up the operating rates of coke companies.
On the demand side, steel prices have fluctuated and fallen recently. Besides, the coke inventory carried by steel mills is in a reasonable level, and the mills intended to lower the purchase prices.
Steel scrap
On February 15, the prices of steel scrap across the country trended in both directions. In Guangxi and Hebei, the steel scrap prices increased by 20-50 yuan/mt while that in Inner Mongolia, Shandong and Hunan declined by 10-60 yuan/mt. The supply and demand was balanced, but the panic market sentiment dragged down the prices. For example, the prices in East China fell 30-50 yuan/mt, and the prices in south-west China dipped about 30 yuan/mt.
On the demand side, the pre-holiday stockpiles of steel mills were relatively low, resulting in a strong post-holiday demand. On the supply side, steel scrap recycling and processing enterprises have not yet fully recovered, and were reluctance to sell.
Finished products:
Rebar
Rebar futures fluctuated at a high level yesterday, and the spot prices followed up slightly. But the downstream is sensitive to price increase, and the light transactions of high-priced goods weighed on the upward trend of spot prices.
On the supply side, according to SMM research, the operating rates of electric arc furnaces rose 12.15 percentage points weak-on-weak but dipped 19.95 percentage points year-on-year to 39.65%. BF steel mills produced stably and the rebar output continued to rebound. On the demand side, downstream enterprises gradually resumed work, but the terminal demand was average due to the decrease in projects and the increasing closing projects.
HRC
HRC futures remained high yesterday and closed with gains of 1.48%. In terms of the spot market, the transactions weakened amid the wait-and-see sentiment. The transactions were mostly at low prices.
The demand recovered steadily, and the pace of recovery in east China and south China is significantly faster than that in the north China. In the follow-up stage, the steady recovery of demand will further boost market confidence. But at this stage, demand in the north China has not yet fully recovered, and terminals are more cautious in procurement.
