**Steel Market Outlook for Week 48 of 2013 (December 2–6)**
The current macroeconomic environment remains stable, with steel mill output showing a slight decline. According to the China Iron and Steel Association, the daily crude steel production of key enterprises in mid-November reached 1.75 million tons, down 0.7% from the previous month. The national average daily crude steel output was 2,131,900 tons, a decrease of 0.57% compared to the previous month. With the steel market entering its off-season, demand has gradually weakened. As a result, the domestic steel market is expected to remain relatively stable this week.
According to the weekly price forecast model by the Information Research Center, steel prices are expected to fluctuate slightly during the period of December 2–6. Long product prices may see a minor decline, while plate prices are likely to remain steady. The national steel price index is projected to hover around 138.7 points, with an average steel price of approximately 3,610 yuan per ton. The long steel price index is expected to remain near 156.1 points, with a small drop of about 0.3 points. The sheet price index is anticipated to stay around 117.5 points, with minimal fluctuations.
Market research data from the Information Research Center also indicates that domestic long product prices will experience a slight decline this week, while plate prices will remain stable. Raw material prices, including iron ore, are expected to show minor fluctuations. Coke prices may rise slightly, scrap prices will remain steady, and billet prices are likely to decrease slightly.
Looking at the broader context, the steel market saw slight upward movement during the 48th week of 2013 (November 25–29). The main contract for rebar, 1405, performed well, with the closing price rising by 56 points compared to the previous week. The total trading volume for the main force was 152.3 million hands, with a reduction of 48,310 hands. Most of the reductions were short positions.
Domestic steel inventories have continued to decline for seven consecutive weeks. On November 29, the total steel inventory in 29 key cities across the country stood at 12,447,100 tons, a decrease of 98,700 tons or 0.79% from the previous week. The decline rate slowed slightly compared to the prior week. Sub-sector inventories showed mixed trends: wire rod inventories dropped by 0.95%, rebar inventories fell by 0.90%, hot rolled coil inventories declined by 0.06%, cold rolled coil inventories dropped by 0.95%, and plate inventories decreased by 1.15%.
On the macroeconomic front, industrial profits remained strong. From January to October, the total profit of large-scale industrial enterprises increased by 13.7% year-on-year to 4.6263 trillion yuan. The growth rate was 0.2 percentage points higher than the first nine months of the year. In October alone, the total profit of these enterprises reached 581.04 billion yuan, up 15.1% year-on-year.
In the steel sector, the industry reported improved profitability. From January to September, the iron and steel industry achieved a profit of 127 billion yuan, up 39.9% year-on-year. However, in October, large and medium-sized steel enterprises saw a significant drop in profits, with a total profit of 1.716 billion yuan, a decrease of 47.46% compared to the same period last year.
Downstream demand also showed mixed signals. Shipbuilding activity declined, with 34.8 million dwt of ships completed from January to October, a 25.4% drop from the same period in 2012. Meanwhile, the internal combustion engine industry saw some recovery in October, with sales reaching 4.967 million units, a 5.42% increase year-on-year.
Overall, the steel market is navigating through a period of moderate price fluctuations, driven by declining production, reduced demand, and shifting macroeconomic conditions. Investors and industry participants should closely monitor these trends as the market continues to evolve.
Heilongjiang Junhe Building Materials Technology Co., Ltd , https://www.junhejiancai.com