Further clarity:Tighten supply and margin to improve
Per our latest monthly proprietary steel survey, mill supply has tightened in Aug due to increasing plant maintenance and production cut, and market is generally optimistic in future price outlook due to the continued supply cut in Sep and air pollution control policies in Tangshan for Winter Olympics. Margin improved due to lower raw material costs, and market also has better sentiment for demand due to gradual entry into the peak sales season esp. for long steel.
For traders, the sales and inventory were fluctuating within a narrow range in Aug, and speculative demand was sluggish. But heading into Sep, the merchants are still cautiously optimistic about the market outlook, given gradual demand pick up, while supply may not see obvious increment.
Most expect stable demand, all mills profitable
Price outlook and profitability: Surveyed market participants (both steel mills and traders) are expecting rebar price increase of RMB214/t and HRC price increase of RMB142/t in Nov 2021 from the Aug average. All surveyed HRC/ rebar mills were able to make profits, which is the 7th consecutive month for HRC and 2nd for rebar mills.
Mills’ reported demand for Aug: For long steel, 66%/75% of steel mills witnessed stable property/ infrastructure demand in August, vs. 30%/19% seeing declining demand and 4%/6% seeing rising demand. For flat steel, demand is relatively worse in auto/ machinery with 20%/15% seeing decline in Aug, vs 80%/71% stable and 0%/14% rise. Further processing performed better, with 31% increasing vs 67% flattish. 97% said home appliance demand was stable.
Mills’ demand expectation for Sep: For long steel, surveyed mills turned more positive (from neutral) on property/ infrastructure, with 43%/52% expecting increasing demand, vs. 57%/48% expecting stable and none expecting decrease. For flat steel, mills are most optimistic on further processing demand, with 47% expect a rise and 53% expect stable. 72%/ 79% expect stable demand in machinery/ auto, vs. 28%/ 20% expect increasing demand, and 0%/1% see decline. 97% expect stable home appliance demand.
Production and sales: Utilization rates at rebar/HRC mills dropped 5.9%/0.4% MoM in Aug, In Sep, production from rebar are expected to lift by 0.3% MoM while HRC mills to decline by 1.4%. Sales volume at rebar/HRC mills dropped 3.5%/3.4% MoM in Aug (worse than market expectation of +0.1%/-0.9%). Mill expect rebar/ HRC sales to rebounded by +7.8%/ +0.5% in Sep.
Iron ore inventory at large mills was flattish MoM in Aug at 12 days, while medium mills +0.5 day and small mills +1.5days. For Sep, large mills are likely to slightly cut iron ore procurement by -1%, while medium mills to +1% and small mills remain flattish
Source: BofA Global Research; Note: This indicator is intended to be an indicative metric only and may not be used for reference purposes or as a measure of performance for any financial instrument or contract, or otherwise relied upon by third parties for any other purpose, without the prior written consent of BofA Global Research. This indicator was not created to act as a benchmark.
- Forums
- ASX - By Stock
- FMG
- Iron ore price
Iron ore price, page-36698
-
- There are more pages in this discussion • 17,936 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add FMG (ASX) to my watchlist
|
|||||
Last
$16.30 |
Change
0.420(2.64%) |
Mkt cap ! $50.18B |
Open | High | Low | Value | Volume |
$16.00 | $16.53 | $16.00 | $202.0M | 12.41M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 895 | $16.29 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$16.33 | 237 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 895 | 16.290 |
1 | 500 | 16.280 |
1 | 1 | 16.260 |
5 | 2000 | 16.250 |
1 | 382 | 16.230 |
Price($) | Vol. | No. |
---|---|---|
16.330 | 237 | 1 |
16.340 | 1385 | 4 |
16.350 | 600 | 1 |
16.360 | 2500 | 1 |
16.370 | 23066 | 1 |
Last trade - 16.10pm 11/09/2024 (20 minute delay) ? |
Featured News
FMG (ASX) Chart |