As of July 26, HRB400 rebar in Shanghai decreased by 120 yuan/ton (USD 16) on the week to 3,220 yuan/ton (USD 444). This figure represents a 15.3 percent decrease on an annual basis. The futures market also showed a similar trend. The prices of iron ore scrap and coking coal, which are the supporting elements of steel production, decrease this week, reducing the support power of steel prices.
On the supply side, production of five major steel products, except for hot rolled coil, saw a drop. Hot rolled coil production saw a slight increase of 15,000 tons, with total production set at 2.43 million tons. On the demand side, five main types saw a weekly decrease of 2-8%. The trade volume of construction steel remained at 103,000 tons, down by 12,000 tons monthly and 34% annually.
This week, the total steel stock was determined as 17.579 million tons, showing a weekly increase of 6,000 tons. While there was a decrease of 72,000 tons in social stocks, steel mills' stocks increased by 78,000 tons. There was a significant increase in the stocks of steel plants compared to last year, indicating that a certain stock pressure continues.
In terms of profitability, the gross profits of steel companies have decreased in the past month. It is expected that the pressure on profits will continue in the short term due to the decrease in steel prices.
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