Economic Herald reporter Liu Yong

Under the continuous regulation and control of the    policy, domestic steel prices have fallen. Rebar has dropped from the highest level of around RMB 6,200/ton in May to around RMB 5,000/ton now, a drop of more than RMB 1,000.

   The Economic Herald reporter found in the survey that the price in May When it is relatively high, the cost of downstream construction companies rises, thereby reducing purchases or even stopping purchases. After the steel price returned to the normal price, the purchase volume of downstream enterprises has rebounded significantly. Some downstream companies that had previously given up taking orders restarted taking orders after steel prices stabilized.

  “Roller Coaster” Quotes

   Recalling the steel price”roller coaster” market in May, steel trader Yang Hong still had lingering fears,”That is to say, I have been working for a long time, otherwise my heart can’t stand it.”

   The price has risen rapidly by more than 1,000 yuan in just 10 days /Ton-The sharp rise in early May caused the prices of most steel varieties to hit a record high. The average price of eight major varieties of steel in the market exceeded 6,600 yuan per ton.

  ”In the most extreme case, it can be adjusted several times a day The price increases by thirty or fifty yuan in one hour.” Yang Hong told the Economic Herald reporter,”Even when I gave a quote to a customer, the price rose again after I hung up the phone.”

  Jinan Deputy General Manager of Huaxin Trading Co., Ltd. Kang Ying also feels the same. She told the Economic Herald reporter:”At the craziest time, when we quote downstream customers, we made it clear that it was the price at that time. It’s hard to say what the price is in one hour.”

  In the eyes of many people, steel prices are skyrocketing, and steel traders should make a lot of money, but Yang Hong said that they Doesn’t make money.

  ”The price of steel is rising, the basis for making money It’s not us distributors, but steel companies.” Yang Hong told the Economic Herald reporter, with rebar As an example, generally speaking, the production cost per ton of this steel is roughly 1.6 tonsiron ore +0.4 tons of coke + alloy fee approximately + asset depreciation fee + personnel salary.

   Yang Hong settled an account for the Economic Herald reporter :According to the price in mid-May, iron ore is 1,400 yuan/ton, 1.6 tons of iron ore is about 2,300 yuan; coke is calculated at 2,500 yuan/ton, 0.4 tons of coke is 1,000 yuan, plus other expenses, to produce one ton of rebar The cost is 4,000 yuan, but the price at that time was around 6,200 yuan/ton.”Although this algorithm is not very accurate, it can be seen that the profit of the steel plant is still relatively high .”

  ” Instead of making money, we returned”Losing money.” Yang Hong said,”The main reason is that sales have fallen sharply. According to past experience, our sales in May should be around 50,000 tons, but in fact there are only less than 20,000 tons of sales. The main reason is the continuous increase. The price makes the downstream construction companies miserable, thereby reducing the purchase volume or even stopping the purchase.”

  ”I have a customer who ordered 1,000 tons of steel before the price increase. As a result, the price rose by more than 1,000 yuan per ton in mid-May. For this, the customer had to pay more than 1 million yuan, which greatly exceeded the cost. The customer’s expectations, so he directly broke the contract because the business could not be done.” Kang Ying said.

  Terminal companies:the product may be adjusted back to the original price

  ”I re-accepted the order at the end of May.” Sun Hongzhi, general manager of Jiyang Senyi Co., Ltd., said in an interview with a reporter from the Economic Herald,”5 Because of the high price of steel, the company simply couldn’t afford it. If we produce one piece and lose one piece, we have no choice but to stop taking orders.”

  Sun Hongzhi told the Economic Herald that the quotation of bearing steel in May was as high as RMB 7,200/ton, which was unbearable for them. After using the stock of bearing steel, Sun Hongzhi had no choice but to suspend the order.

   Regarding price increases to reduce cost pressure, Hongzhi Sun It was not unexpected, but it was not implemented in the end.”The main reason is that our price increase cannot keep up with the price increase of raw materials, and the increase is too large. The market is also difficult to accept for a while.”

   The same situation, Zhang Huaiguang, who worked in a mechanical engineering production company in Shandong, also met. As the purchasing manager of a company, he is always aware of the changes in steel prices.”The price of steel market has continued to rise this year, and the company has been under the operating pressure of rising raw materials. It has increased by 2,800 yuan per ton over the same period last year, a year-on-year increase of 75%.” He told the Economic Herald reporter.

  ”Upstream raw material prices are rising, the company has a long-term price agreement , Centralized procurement and other countermeasures, but when the price increase of raw materials accumulates to a certain extent, the product price will be adjusted accordingly.” Zhang Huaiguang said,”Due to the price increase, we adjusted the price on May 17.”

   Economic Herald reporter learned that since May, Zoomlion Station machinery, hoisting machinery, XCMG tower crane, construction hoist, temporary loaders issued successively Notice of price increase. The price adjustment policy of Zoomlion and Xugong Machinery is that tower cranes and the full range of elevators are based on the product steel Net weight, the price is raised by 1,000 yuan/ton. The price of Shandong Lingong loader is increased by 8,000 yuan/unit to 20,000 yuan/unit according to different systems.

   Now the steel price has stabilized after the plunge, and the company Will the product selling price be restored to the previous price?”Do not rule out this possibility.” Zhang Huaiguang said.

  A good time to stock up?

   steel prices fell sharply, most The willingness of downstream companies to purchase has increased significantly.

  ” I feel that the price is basically stable, and I am ready to withdraw some funds Reserve steel.” Sun Hongzhi said,”Moreover, we need to reserve more, and plan to rent a warehouse to store various raw material steels.”

   Zhang Huaiguang also holds the same opinion. He said that a batch of steel was purchased at the end of April to ensure normal production, and there is still one month left. in stock.”The current steel price is close to our psychological price, and we will seize the right time to reserve in June.”

  ”My Steel” survey shows that after the sharp drop in steel prices, most downstream companies believe that June and July is a good time to reserve steel, and there may be concentrated downstream Purchasing behavior.

   Zhang, manager of the recruitment department of a real estate developer in Jinan In an interview with a reporter from the Economic Herald, Leilei said that although he plans to stock up, he is worried that steel prices will continue to fall.”A small increase or decrease is okay. If the price of steel continues to fall sharply after stockpiling, it is a mistake in my work. I cannot bear this kind of responsibility.”

   Regarding Zhang Leilei’s concerns, Li Zhen, deputy general manager of Jinan Qinsheng Economic and Trade Co., Ltd., said,”Later market conditions will Get out of emotionality and return to the dominance of supply and demand, and price fluctuations will also become more rational. It is expected that steel prices may fluctuate in a weaker position in June.”

  In Li Zhen’s view, there is no room for growth in June, and the following July and August are not peak seasons for traditional demand. South enters the rainy seasonNorth /span>It is the hot summer again, and terminal demand will undoubtedly be suppressed, and poor demand expectations have also suppressed price expectations.

  ”The plunge has basically ended, and the current seasonal off-season is coming , The intensity of demand across the country will be seasonally weakened, but the enthusiasm of steel mills in production has not declined. Both ends of supply and demand show a trend of declining and increasing. It is difficult to destock later or increase. It is expected that the market trend in June will return to the fundamentals, and the price may be staged. Sexual rebound, and then continue to oscillate and weaken, but the range is limited.” Kang Ying predicted.