Weak supply and demand, insufficient action on steel prices

Concentrated commencement of major projects in multiple regions, accelerating efforts to stabilize investment

Since the beginning of this year, major projects in multiple regions have started construction, and the investment scale has significantly increased. According to statistics, cities such as Henan and Anhui have proposed investment growth targets of 10% or more. From the perspective of investment areas, infrastructure construction, especially new infrastructure, has become an important driving force. At the same time, investment in the manufacturing industry will continue to grow rapidly, and a series of policy measures that are conducive to manufacturing investment, enterprise research and development investment, and technological transformation investment are being prepared.

Analysts' view: fixed assets investment will still become the "ballast" for the smooth operation of the economy in 2022, in which infrastructure investment and manufacturing investment will become the main driving force, jointly supporting the steady growth of fixed assets investment, and laying the foundation for demand explosion after the year.

Multiple regions have adjusted their housing provident fund loan policies, with mortgage interest rates following the LPR downward trend

With the reduction of LPR (Loan Market Quotation Rate), the interest rates of personal housing mortgage loans in Beijing, Shanghai, Shenzhen, Guangzhou, Suzhou and other places have been adjusted accordingly. At the same time, some banks have also lowered their floating base points, with the lowest interest rate for first home mortgage loans dropping to 4.9%. According to multiple bank branches in Shanghai, the interest rates for first home loans have dropped below 5%, to 4.95%, and for second home loans, to 5.65%. The mortgage interest rate has been lowered by 5 basis points along with the LPR.

Analyst's view: Recently, a new policy on housing provident fund loans was released, which clearly relaxed the requirements for housing provident fund loans. The issuance speed of commercial loans for purchasing houses in 2022 has significantly improved compared to the second half of 2021. The increase in funding supply promotes production by manufacturers, drives raw material procurement, and benefits steel prices.

China Steel Association: Steel prices will fluctuate narrowly

Recently, the China Steel Association issued a statement stating that the current macroeconomic situation is seeking progress while maintaining stability, and the demand for steel in downstream industries is relatively stable. The state adopts an active fiscal policy and a prudent monetary policy to maintain reasonable and sufficient liquidity; Increase support for the development of the real economy; Implement new tax and fee reduction policies and strengthen support for the manufacturing industry; Adhere to the positioning of "housing for living, not for speculation", and promote the construction of affordable housing; Solidly promote the construction of 102 major engineering projects in the 14th Five Year Plan, and moderately advance infrastructure investment and construction. Overall, the demand for steel in the later stage will remain relatively stable.

Analyst's view: The country is focusing on stabilizing macroeconomic development, and relevant policies will be introduced one after another. Overall, with more positive news and policy regulation, prices are expected to increase slightly after the year under the premise of controllable epidemic situation.

Market price

Steel prices remain stable with a slight increase today

Two out of 24 markets for rebar increased by 20-30%, and the average price of 20mm HRB400E was 4795 yuan/ton, an increase of 4 yuan/ton compared to the previous trading day;

Out of the 24 hot rolled coil markets, 10 rose by 10-70, 1 fell by 10, and the average price of 4.75 hot-rolled coils was 4903 yuan/ton, an increase of 19 yuan/ton compared to the previous trading day;

Among the 23 markets for medium and thick plates, 8 rose by 10-60%, and the average price of 14-20mm ordinary medium plates was 5051 yuan/ton, an increase of 13 yuan/ton from the previous trading day.

The price of ordinary square billets in the Tangshan area increased by 40% to 4480 yuan/ton, including taxes, and the prices of various mainstream steel varieties remained stable with individual increases.

Today, a total of 20 steel mills have adjusted their prices, of which 17 have increased their prices, accounting for 85%. The price adjustment range is 20-110 yuan/ton, with the highest increase being for the Puyang Plate; Lowering None; Three companies are on par, accounting for 15%.

Futures steel fell overall today

Today, the main futures of Thread fell 52, closing at 4665, a decrease of 1.1%; The main force of the hot coil fell 48, closing at 4773, a decrease of 1%; The main force of coking coal fell 87% to close at 2166, a decrease of 3.86%; The main force of coke fell 47% to close at 2900, a decrease of 1.59%; The main force of iron ore fell 12.5% to close at 740, a decrease of 1.66%.

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