February’s Lunar New Year holidays, the traditional, pre-market prices remained stable in the New Year fell slightly, to stabilize the market price before the holiday week, mainly. As the steel mills during the Spring Festival have the resources to arrive one after another, after the holiday market, a greater increase in common stock.

Postganglionic business one after another work by the expected impact of higher negotiated iron ore, Baosteel will raise the market prices, as well as external disk during the Spring Festival, and gold futures prices of the impact of a strong post-holiday business mentality, drawing up tentative, subject to demand is not difficult to support higher prices.

As of Feb. 22, 25mm rebar national average price in 3769 yuan / ton, last month dropped 32 yuan / ton; which Beijing 25mm price of 3730 yuan / ton, over the same period last month, up 70 yuan / ton; Shanghai 18-25mm price of 3810 yuan / ton, up 140 yuan over the same period the previous month / ton; Guangzhou 18-25mm price of 3980 yuan / ton, last month dropped 10 yuan / ton; domestic 6.5mm high speed wire average price in 3879 yuan / ton, up 185 yuan over the same period the previous month / ton, Beijing 6.5mm high cable prices in 3750 yuan / ton, last month over the same period rose 20 yuan / ton, Shanghai price for 6.5mm high wire 3,720 yuan / ton, compared with the previous months earlier to 70 yuan / ton to 3,830 yuan in Guangzhou price / ton, down 150 yuan over the same period the previous month / ton.

By the end of February happens to be the first month 15, the basic construction sites from the fifteenth day after the start. With the construction site started gradually began to demand, market demand will pick up gradually, but by the high levels of inventory as well as macro-policy has raised the bank reserve rate loans to builders and distributors to tighten, it will affect the continuity of the market rose sharply is expected in March next year, the domestic construction steel market prices will show a gradual upward trend.

1, construction steel output:

In February to overhaul more steel, blast furnace steel mills cut production in February the National average of 11.7%, significantly up from last month. At the same time as energy shortages, so there is a downward trend in steel production. Steel production from the current situation, in February the total production of 6,352,900 tons Rebar program, 297,600 tons less than in January, in which East is still the largest proportion of production. This month the previous month significantly increased the proportion of steel exports, steel direct supply to reduce the number of the previous month, amount of rebar in the domestic running flat the previous month.

February Wire plans to produce the total 3.703 million tons, 400,500 tons less than the previous month. Wire exports decreased from the previous month, while the steel mills in January this month, slightly higher than the number of direct supply to enhance, put on the market, the ratio increased slightly from last month. Overall, in February the high wire and rebar market decline in resource allocation, which is less than the high pressure line inventory stock rebar pressure.

2, the social construction of steel inventory.

According to statistics, the main city of steel, wire marked increase in the trend continued. As of February 22, the number of major cities as 678.73493.42 tons Rebar Stock, Zhou 19.040% sequential growth, up 37.56 percent on year. One stock to 68.72 in Shanghai 535,900 tons Rebar, Zhou ring rose 17.06%, up 28.23 percent on the Beijing rebar inventories 548,600 tons, up 22.58% of chain week, month, year 35.31%, Guangzhou rebar stock 675 000 tons, up 28.79% of chain week, month, year on year growth of 38.83 percent. The national total of 1,924,300 tons wire stock, rose 20.81 percent pericyclic, up 80.09% month.

Among them, 119,400 tons in Shanghai stock wire, chain growth of 41.3% week, month, year on year growth of 19.16%; Beijing Wire stock at 89,900 tons, up 12.97% of chain week, month, year on year growth of 78.81 percent, Guangzhou wire stock at 25.5 million tons, Cycles of growth of 8.5% compared with a monthly increase of 66.78%.

Analysis of domestic construction steel inventory position at the community, because nearly a month before the Spring Festival domestic construction steel market, not only enter, so that rebar and wire rod of the social stock, compared with before the holiday, there are increased substantially, and after the Spring Festival stock reached its highest level ever, after the Spring Festival market pressures greater resources, will affect the market trend.

3, the original fuel prices continue to rise.

Iron ore prices in 2010 is expected to do very strong, there is news that five major metallurgical enterprises in China and BHP Billiton, Rio Tinto and CVRD to raise iron ore price agreement, under the agreement, arrived in Chinese ports iron ore price from 62 dollars per ton in 2009 increased to 84 U.S. dollars, or 40%. This price is much higher than the original ceiling of 20% set, but Rio Tinto and the Japanese and Korean steel mills after the first round of talks, made the demand of 40% price increase.

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