The market is not enthusiastic about ordering, Steel mill output may continue to decline

By the end of the year, coupled with the impact of the sudden drop in temperatures across the country, many construction sites have stopped work in advance for holidays. At the same time, starting from this week, traders have gradually entered a holiday state. This shows that both terminal pre-holiday replenishment and traders' "winter storage" have come to an end.

Judging from the results of recent surveys in many places, due to factors such as the current relatively high price and the relatively sufficient supply of goods in the market, both terminals and traders are not very willing to stock up before the holiday this year. Traders, in particular, have become more cautious after experiencing continuous losses in [winter storage" in recent years, and their willingness to actively [winter storage" is low. Even with passive "winter storage", steel plant contract households in some areas have only completed the minimum amount agreed upon. Judging from the overall market performance, there is not much enthusiasm for ordering this year.

Affected by poor market ordering conditions, high costs and shrinking profits, steel mills' production enthusiasm has been significantly weakened. According to incomplete statistics, more than 20 steel mills have announced maintenance information, and the maintenance time ranges from 30 to 45 days.

According to platform monitoring data, on January 18, 75 steel plants and a total of 115 blast furnaces among the 201 production companies in the country stopped production, of which 72 and 112 were under maintenance. The average daily output of molten iron was 2.1798 million tons, a month-on-month decrease of 2.69%. Thousands of tons. At present, steel plant shutdowns continue to increase, and overall output is showing a downward trend.

At the same time, steel mills` demand for coke and iron ore procurement has not increased significantly, and their enthusiasm for stocking up before the holiday is not high. There is still a certain amount of time before the Spring Festival. At present, the coke inventory of steel plants is maintained at 5-7 days. Starting next week, steel plants will carry out a certain amount of replenishment, but the overall amount will not be too large. This is mainly due to the current low season for finished product consumption and the low overall profitability of steel mills.

So far, steel mills have not made any large-scale replenishment of iron ore before the holidays, and have mainly replenished iron ore in small quantities on demand. The reason is related to high raw material prices, increasing losses of steel mills, resulting in increased production shutdowns and reduced daily consumption. The current inventory of iron ore in steel plants remains at about 31 days. The inventory has changed little in the past three weeks and there is no sign of a significant increase.

To sum up, due to factors such as low market enthusiasm for ordering, high raw material costs, shrinking profits of steel mills, the overall enthusiasm for steel mill production has been significantly affected, and it is expected that pre-holiday output will continue to remain relatively low. As the growth rate of output continues to slow down, it will help ease the market supply and demand situation and will provide certain support for steel prices.

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