**August 27 Steel Market Forecast**
On August 27, the steel market was influenced by a mix of macroeconomic data, geopolitical developments, and sector-specific trends. Let’s take a closer look at the key updates.
**Macro News Briefing:**
1. **U.S. Durable Goods Orders Drop Sharply in July:**
The U.S. Department of Commerce reported that 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 confirmed that Syrian government forces used chemical weapons against opposition groups. President Obama is reportedly considering countermeasures, adding to regional tensions.
3. **China’s Economy Shows Signs of Stabilization:**
The National Bureau of Statistics stated that China's economy is on a "steady and gradual" path, with expectations of meeting annual development goals. Officials remain optimistic about the second half of the year.
4. **Credit Suisse Raises Growth Outlook for China:**
Credit Suisse revised its 2013 GDP growth forecast for China upward to 7.6%, citing signs that the economy has reached a bottom. However, the bank also lowered its 2014 outlook slightly 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, infrastructure projects, and industry reforms.
**Market Performance on Monday:**
- The Dow Jones Industrial Average fell 0.43% to 14,946.54, while the S&P 500 dropped 0.40% to 1,656.79.
- Gold prices fell $2.70 to $1,393.10 per ounce, and crude oil prices dipped to $105.92 per barrel.
- The London Metal Exchange (LME) copper closed at $7,360 per ton.
**Billet Price Trend (August 27):**
Tangshan general billet prices dropped by 10 yuan/ton. Changli Hongxing and Anfeng offered billets at 3,150 yuan/ton (tax-inclusive), while Tangshan Xinglong and Guoyi followed at the same level. Traders were selling at around 3,032 yuan/ton.
**Iron Ore Price Trend:**
Domestic iron ore prices remained weak, with some slight declines. Hebei concentrate powder markets saw reduced demand, and prices in Tangshan and Chengde dropped. Imported ore prices continued to rise, with buyers showing increased interest.
- 66% sour dry powder in Tangshan: 1,050 yuan/ton
- 63.5% Indian powder from overseas: ~$126
- Tianjin Port 63.5% Indian ore: 960 yuan/ton
- Qingdao 61.5% PB ore: 930 yuan/ton
- Platts 62% price: $139.50 (+$1.00)
**Coke Price Trend:**
Domestic coke prices remained stable, with strong trading volumes. Steel mills were focused on stabilizing coke purchases as downstream steel prices weakened.
- Primary metallurgical coke in Shanxi: 1,290 yuan/ton
- Quasi-class metallurgical coke: 1,200 yuan/ton (tax-inclusive)
- Hebei secondary metallurgical coke: 1,220 yuan/ton
- Huaibei secondary metallurgical coke: 1,250 yuan/ton
- Metallurgical coke factory tax price: 1,290 yuan/ton
**Rebar Prices (August 26 Close):**
- Beijing 25mm three-tier rebar: 3,570 yuan/ton (-20 yuan/ton)
- Shanghai three-tier rebar: 3,560 yuan/ton (flat)
- Guangzhou three-tier rebar: 3,870 yuan/ton (-10 yuan/ton)
**Hot-Rolled Coil Prices (August 26 Close):**
- Shanghai 5.5mm Q235 hot-rolled coil: 3,650 yuan/ton (+10 yuan/ton)
- Tianjin hot-rolled coil: 3,600 yuan/ton (+20 yuan/ton)
- Lecong hot-rolled coil: 3,770 yuan/ton (flat)
**Futures Market Analysis (August 26):**
- Thread bar main contract 1401 opened at 3,827 yuan, touched a high of 3,848 yuan, and closed at 3,813 yuan (+10 yuan).
- RB1311 HR coil opened at 3,718 yuan, reached a high of 3,735 yuan, and closed at 3,731 yuan (+21 yuan).
**Spot Price Forecast (August 27):**
- Beijing 25mm three-tier rebar: Expected to fall to 3,560 yuan/ton
- Shanghai three-tier rebar: Expected to drop to 3,550 yuan/ton
- Guangzhou three-tier rebar: Expected to fall to 3,860 yuan/ton
- Shanghai 5.5mm Q235 hot-rolled coil: Expected to remain stable at 3,650 yuan/ton
- Tianjin hot-rolled coil: Expected to stay at 3,600 yuan/ton
- Lecong hot-rolled coil: Expected to remain at 3,770 yuan/ton
Overall, the steel market remains cautious as traders monitor macroeconomic signals and geopolitical developments. With mixed conditions across raw materials and futures, price movements are likely to continue in the short term.
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