China Steel Association: Domestic steel prices fell by 6 years in October

A report released by the China Iron and Steel Association on the 19th said that although the government has recently issued a series of favorable measures, the macroeconomic environment is still facing many uncertainties due to the fact that the impact of the international financial crisis on the real economy has increased. Therefore, iron and steel enterprises must make full ideological preparations, take effective measures, and actively respond to various challenges.
The data provided in the report shows that the domestic steel market continues to face a slowdown in consumption growth and weak demand, coupled with increased panic in the market and a sharp decline in steel prices. At the end of October, the domestic composite steel price index was 108.59 points, a 35.35 points decrease, a decrease of 24.56% from the previous month, and was the largest month-to-month decline in the price index since 2001.
Among them, the prices of long products and sheet materials have fallen sharply. At the end of October, the price index of long products was 110.47 points, a decrease of 33.21 points or 23.11% month-on-month; the price index of sheet metal was 106.74 points, a decrease of 37.24 points, a decrease of 25.86%, and the decrease in long products and sheet materials was 18.56 and 19.96, respectively. percentage point.
The report believes that the US financial crisis has gradually affected the development of the real economy, market confidence has been hit hard, domestic economic growth has slowed down, production growth in the steel industry has declined, and steel exports have shown a downward trend, causing certain pressure on the domestic market and excessive panic in the market. The non-standard and other factors in the order of competition are the main factors causing the sharp drop in domestic steel prices.
In addition, due to the sharp drop in steel prices, the prices of raw materials for steel production also fell sharply. For example, compared with the end of September, domestic iron ore concentrates, scrap, and coke prices all dropped by more than 30%. According to the report, the price of raw materials fell, and the supporting effect of steel production costs on steel prices also began to move downwards.
However, the future development of the steel industry has also ushered in some positive factors. For example, the government has introduced a series of policies to expand domestic demand, which will stimulate domestic steel consumption demand; the country will adjust the taxation policy for steel exports, which will help improve the efficiency of enterprises and reduce Domestic market pressure; social inventory continues to be at a relatively low level, which is conducive to the gradual stabilization of the steel market price in the later period.
Regarding the next stage of work, the report stated that the iron and steel enterprises must persist in organizing production according to market demand, implement a combination of total control volume and optimized structure, adjust the product structure according to changes in the market consumption structure, insist on no contract and no production, and strive to achieve the basic supply and demand in the domestic market. balance. At the same time, it actively promoted mergers and acquisitions, eliminated backward production capacity, accelerated scientific and technological progress, improved energy-saving and emission reduction work, and transformed economic growth patterns.
The report also stressed that we must strictly regulate and maintain the normal order of steel sales, and we must pay particular attention to preventing competitive price cuts and bargaining, insisting on not paying money, not delivering goods, stressing honesty, and not forming new triangular bonds, and must maintain relatively stable steel product prices and strengthen Communication and cooperation with traders will promote the smooth operation and reasonable recovery of steel prices in the domestic market.

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