Day Trading & Forex Forum

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Affected by the new progress of iron ore negotiation and the continuous drops of steel price, most small steel mills adjusted the EXW price of the construction steel. On August 18, the steel price continued to decline and most products’ prices dove up to 150 yuan per ton. This is the nine consecutive days to drop after the hectic increase in the previous times, and the drop extent reached 900 yuan per ton.

On August 18, based on the price of August 11, Yonggang adjusted down the wire rod price by 500 yuan per ton, debar price decreased 500 yuan per ton and spiral price dropped 500 yuan per ton. On the basis of August 17, the EXW price of 12mm-14mm debar from Jingang was down 50 yuan per ton, other specifications’ dropped 100 yuan per ton and the spiral price sank 100 yuan per ton. Based on the price on August 12, the prices of all wire rod from Chenggang was down 150 yuan per ton and all debar price declined 100 yuan per ton.

Recently the news noted that due to the coming of 60-anniversary National Day, the construction field in Beijing area scheduled shutdown in mid-September, the demand in the construction steel will shrink further and the steel price may continue to sink.

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After Baosteel and Ansteel issued the steel policy for September, On August 24, WISCO, one of the three steel giants, also released the final adjustment policy for September. CRC increased 400 yuan per ton, HRC was up 350 yuan per ton and the galvanized plate boosted 500 yuan per ton. Up to now, the steel price for September from the three steel giants all exceeded August’s 600-1,000 yuan per ton.

According to the report from China Securities Journal on August 25, the market participants believed that although the recent steel price significantly dropped, with a 500-900 yuan per ton falling, the top steel mills were not anxious to adjust down the price for September instead maintain the upward tendency, which aimed at keeping the steel price stable. Because the crude steel production in August set a record high again, while the steel social inventories did not fall but rise, which brought much pressure on supporting the steel price for September.

Pressure from high inventory and production to present

Although the large steel mills tried to stabilize the price for September, the social inventories in the domestic 26 cities presented the dramatic rising year on year, while the crude steel production set a record high in early August. The market participants worried that the aforesaid factors brought the pressure on steel price.


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Recently, the dramatic drops of Baltic Dry Index (BDI) captured the market’s attention.

On August 25, BDI dropped for the six consecutive days with 2388 points, accumulatively decreased 41% from the new highest on July 4 this year, a 4291 points. The falling in August reached 28.7%.

BDI can exactly reflect the tendency of the international dry bulk market, involving China’ s imported iron ore, metallic ores, steel, soybeans, and etc. In H1 this year, BDI significantly increased from the 663 points at the end of 2008 to 4291 points, a 547% rising.

Zhao Weiwei, analyst of Tianqi Future said that “BDI significant growth in H1 can be attributed to the following two factors, on one hand, the international hot money speculation, on the other hand, the demand rising in raw material from China.

According to the data from China’ s General Administration of Customs, in the first seven months this year, the country’ s accumulative iron ore import grew 31.8% over the same period of last year, soybean import was up 27.7% year on year, copper and unwrought copper imports boosted 75% and unwrought aluminum and aluminum with a 193.9% increase totally.


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