Fluctuation of steel pipe price

Production decline led to the decline in steel pipe prices, steel cost pressure has slowed. In August, steel production cuts also reduced iron ore consumption, and under the continued effect of the policy, iron ore decline expectations have been strengthened, making the iron ore price from July straight decline, by the end of August has fallen below $140 / ton. Different from iron ore, the price of coke was raised three times in August when the coal supply was tight due to the limited production of environmental protection, and the current tight supply pattern lacked effective solutions in the short term. But overall, the cost pressure of steel enterprises eased this month, the purchase price index was 47.7%, down 8.6 percentage points from the previous month, nearly 10 months to fall below 50% for the first time.

The impact of off-season and epidemic factors appears, steel market demand of round steel pipe continues to decline. In August, the domestic steel market demand continued to be weak operation, the new order index was 31.6%, down 5.2 percentage points compared with the previous month, four consecutive months at 40% below. According to the investigation, the overall domestic demand performance is not good, and the demand in eastern and southern China is restrained by high temperature, rainy weather and repeated epidemic. From the perspective of the main steel industry, the demand for steel used in infrastructure construction is not very optimistic. Due to the slow issuance speed of local government special bonds and the impact of the epidemic on the flow of personnel and materials as well as the pace of construction, the construction is slow due to the shortage of funds for the construction side. The demand for square steel pipe used in real estate also fell. The area of new housing starts fell by 0.9% from January to July. The area of land purchased by real estate development enterprises fell by 9.3% year on year. Iron and steel exports, in August 1 to 23 steel products after the cancellation of export tax rebates, exports continue to tighten rapidly, the new export order index is 31.8%, two consecutive months below 35%, indicating that the policy has a more obvious role in limiting steel exports.

In August, although steel production fell, the demand drop is more obvious, so the selling price support significantly weakened. On August 2, Shanghai rebar price index was 5179 yuan/ton for the highest month. Market demand of rectangular hollow section is expected to pick up, steel prices also rose slightly. In comparison, steel industry profits declined in July after reaching a high for the year in June, and may have declined month-on-month in August due to lower prices and lower trading volumes in August.