After the Spring Festival, the spot market for steel is expected to see a slight upward trend, driven by optimistic expectations, rising costs, and relatively stable supply and demand. The "opening" period after the holiday has mainly been marked by a shock-driven movement, with prices showing a modest increase. Here are the key factors behind this trend:
First, current steel prices are neither high nor low. They have risen from a bottom level, with an increase of about 400 yuan per ton. In this relatively off-season period, market participants are cautious and hesitant to push prices higher immediately. A short consolidation phase can help build confidence and set the stage for a more sustained upward movement.
Second, raw material prices are on the rise. On January 18, MYSTEEL's statistics showed that iron ore port inventories had dropped to nearly two-year lows, reaching 70.65 million tons. Additionally, Australian weather disruptions continue to affect iron ore shipments, which could impact post-holiday supply chains. With the Spring Festival approaching, some steel mills are also preparing raw materials, and there may be increased purchasing activity once the holiday ends.
Third, rising production costs are pushing steel prices higher. Steel mills are increasingly using high-priced raw materials from previous periods, leading to higher overall costs. Moreover, as market expectations point toward a short-term price increase, raw material prices are unlikely to fall, supporting steel prices. Most steel mills are not inclined to lower their prices during this time.
Fourth, many steel mills that were previously near break-even are now expecting a price rebound in the near future. This expectation encourages them to maintain or even raise prices. Some companies, like Baosteel, have already announced price increases of 100–300 yuan per ton for March, signaling a positive outlook.
Fifth, the gap between factory prices and spot market prices is not significant, and in some cases, it’s even inverted. Meanwhile, downstream orders remain strong, and traders have increased their stock levels, which are still lower than the same period last year.
From a historical perspective, the probability of a price increase in February is quite high. Between 2001 and 2012, steel prices rose in 11 out of 12 years, with only one decline in 2009. Although adjustments often occur in most years, the market tends to rebound quickly. This year, with similar timing to 2005, when a rally followed the Spring Festival, the outlook remains positive.
Additionally, the international market could further support domestic steel prices. Key indicators like the Baltic Dry Index (BDI) have been rising, while Japan and the U.S. continue with expansionary monetary policies. Signs of recovery in real estate and other sectors are becoming clearer, and global steel prices are also on the rise, which supports export activities and drives up domestic prices.
Of course, there are risks. High crude steel production, tight financial conditions, and a potential surge in inventory after the Spring Festival could weigh on prices. If demand does not pick up quickly, market confidence might weaken.
In conclusion, the spot steel market is likely to experience a gradual upward trend following the Spring Festival, supported by optimism and rising costs. For investors, opportunities may arise in the 1305 contract, especially if prices remain below 4000. A phased strategy could be considered for better returns.
Single Handle Sink Kitchen Mixer Faucet
Kitchen Sink Taps is an economic Kitchen Faucet, Single handle operate and cold valve core design. Outlet pipe can be 360 ° rotation, bubbler outlet water more lively and comfortable. Kitchen sink mixer is suitable for all kinds of kitchen sinks, single hole deck mounted installation.And the use of high-quality spool, you can also customize your favorite color
Single Handle Sink Kitchen Mixer Faucet,Single Handle Sink Kitchen Mixer,Single Handle Sink Kitchen Faucet,Single Handle Sink Kitchen Mixer Taps
WENZHOU CHENKAI SANITARY WARE CO.,LTD , http://www.cnchenkai.com