**August 27 Steel Market Forecast**
First, the macroeconomic updates:
1. **U.S. Durable Goods Orders Drop Sharply in July**: According to data released by the U.S. Department of Commerce, durable goods orders fell by 7.3% in July, marking the largest decline since August 2012. This drop exceeded expectations and ended a three-month streak of growth, signaling a slowdown in manufacturing activity.
2. **U.S. Accuses Syria of Using Chemical Weapons**: U.S. Secretary of State John Kerry stated that Syrian government forces used chemical weapons against opposition groups, prompting discussions about potential countermeasures from the Obama administration.
3. **China’s Economy Shows Signs of Stabilization**: The National Bureau of Statistics spokesperson, Sheng Laiyun, highlighted that China's economy is on a "steady and gradual" path, with confidence in achieving annual development goals for the second half of the year.
4. **Credit Suisse Raises China Growth Outlook**: Credit Suisse upgraded its 2013 GDP growth forecast for China to 7.6%, citing signs that the economic bottom has been reached. However, the upward trend remains modest, and growth expectations for 2014 were slightly revised downward to 7.6%.
5. **Western Development Plan Announced**: The National Development and Reform Commission released a notice outlining this year's western development initiatives, including policy improvements, industrial development, infrastructure projects, and reform measures.
Second, the market performance on Monday:
- **Stocks Declined Amid Uncertainty**: The Dow Jones Industrial Average dropped 0.43% to 14,946.54, while the S&P 500 fell 0.40%. Gold prices declined by $2.70 to $1,393.10 per ounce, and crude oil settled at $105.92 per barrel. The UK stock market was closed due to a public holiday.
Third, billet price trends:
- On August 27, Tangshan general billets dropped by 10 yuan/ton. Changli Hongxing and Anfeng quoted at 3,150 yuan/ton (tax-inclusive), while Tangshan Xinglong and Guoyi also offered at 3,150 yuan/ton. Traders were selling around 3,032 yuan/ton.
Fourth, iron ore price trends:
- Domestic iron ore prices weakened slightly, with some regions like Tangshan and Chengde reducing prices. Meanwhile, imported ore prices remained stable, with increased buyer interest. The price of 66% sour dry powder in Tangshan was around 1,050 yuan/ton, while Indian ore was priced at approximately $126 per ton. In Tianjin, 63.5% Indian ore was quoted at 960 yuan/ton, and 61.5% PB ore in Qingdao was at 930 yuan/ton. Platts 62% ore closed at $139.50, up $1.00.
Fifth, coke price trends:
- Domestic coke prices remained stable, with strong transaction volumes. Most steel mills aimed to stabilize purchase prices as downstream steel prices remained weak. Inventories in Tianjin Port increased, while production rates rose among major coke producers. Metallurgical coke prices in Shanxi stood at 1,290 yuan/ton, with secondary coke at 1,220 yuan/ton in Hebei.
Sixth, rebar and hot-rolled coil prices:
- On August 26, Beijing’s 25mm three-tier rebar closed at 3,570 yuan/ton, down 20 yuan/ton. Shanghai’s three-tier rebar was at 3,560 yuan/ton, flat from the previous day. Guangzhou’s three-tier rebar fell 10 yuan/ton to 3,870 yuan/ton. In Shanghai, 5.5mm Q235 hot-rolled coils rose 10 yuan/ton to 3,650 yuan/ton, while Tianjin’s hot-rolled coils increased by 20 yuan/ton to 3,600 yuan/ton.
Seventh, futures analysis:
- The main contract of thread steel (1401) opened at 3,827 yuan, touched a high of 3,848 yuan, and closed at 3,813 yuan, up 10 yuan/ton. Volume decreased, and open interest fell. Expected support at 3,800 yuan/ton and resistance at 3,850 yuan/ton.
- For HR coil RB1311, the contract opened at 3,718 yuan, rose to 3,735 yuan, and closed at 3,731 yuan, up 21 yuan/ton. Open interest and volume both declined. Support at 3,718 yuan/ton and resistance at 3,748 yuan/ton expected.
Eighth, spot price forecasts:
- It is expected that Beijing’s 25mm three-tier rebar will fall to 3,560 yuan/ton today. Shanghai’s three-tier rebar is likely to drop to 3,550 yuan/ton, and Guangzhou’s grade rebar will remain at 3,860 yuan/ton.
- Prices for 5.5mm Q235 hot-rolled coils in Shanghai are expected to stay stable around 3,650 yuan/ton. Tianjin’s hot-rolled coil prices will remain at 3,600 yuan/ton, and Lecong’s will be around 3,770 yuan/ton.
This summary reflects the current state of the steel market and related economic indicators as of August 27.
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