China Steel Association: steel consumption will enter the off-season steel prices or high volatility.

On November 7, the China Iron and Steel Industry Association (CISIA) said that in October, due to the influence of the steady growth policies and measures of the state, the market expectations increased, the release of iron and steel production capacity maintained a high level, which led to the increase of iron ore demand expectations and prices. Later market is about to enter the off-season of steel consumption, steel output will be reduced, iron ore demand intensity will show a downward trend, price is difficult to sustain rising, will show a small fluctuation trend.

At the end of October, the China Iron Ore Price Index (CIOPI) was 272.14 points, up 22.25 points, or 8.90%, compared with the previous month, an increase of 5.43 percentage points.

Steel output began to slide. According to the statistics of the 10-day report of the Iron and Steel Association, in the middle and early October, the average daily production of crude steel by member iron and steel enterprises was 197.83 million tons, which was estimated to be 2.528 million tons of crude steel nationwide, down 7.13% from September, and the daily production of iron in China was estimated to be 203.3 million tons, down 8.12% from September. Affected by the decline in steel production, iron ore demand intensity has also been reduced.

Inventory. According to CISCO's monitoring, at the end of October, the stock of imported iron ore ports in China was 145 million tons, up 20,000 tons annually, up 0.01%; but it rose 9.24 million tons annually, up 6.80%, still at a higher level; in September, the output of pig iron in China was 66.38 million tons, down 0.42%; while the import of iron ore was 93.47 million tons annually, up annually. 4.61%. Overall, the situation of oversupply of iron ore market has not changed.

Judging from the trend of steel prices, due to relatively stable demand, supply pressure is greater. According to the monitoring by the Iron and Steel Association, the China Steel Price Index (CSPI) was 121.72 points at the end of October, up 0.08 points and 0.07% from September, showing a narrow fluctuation trend. According to the data of the National Bureau of Statistics, the purchasing managers index (PMI) of China's manufacturing industry dropped by 0.6% in October, with the production index and new order index falling by 1.0 and 1.2 percentage points respectively. It is expected that the price of iron ore will not continue to rise in the late stage and will show a slight fluctuation trend.

Wang Guoqing, of Langer Iron and Steel Research Center, told China Securities News that in October, due to the fluctuation of raw material prices, the supporting role of cost on later steel prices was gradually strengthened; the social stock of steel increased first and then decreased, especially the pressure of building materials inventory decreased; and from mid-November, the limited production of heating season will be released, and the steel production capacity will be released. It will be restrained, but demand will shrink and the improvement of supply-demand relationship will be limited due to the coming winter in the north. It is expected that the steel market will show high volatility in November. (source: China Certification Network)