The post-holiday steel price trend has sparked optimism across the industry. With rising raw material costs, sharp increases in steel mill ex-factory prices, and strong expectations for continued support after the holiday, market participants are showing a more bullish sentiment. As a result, many anticipate a “good start†for the new year. However, concerns remain about how long and how high the price increase can be sustained.
In line with the traditional Chinese “opener†concept, traders often expect a strong opening to the year, and it's common for prices to rise once the market reopens. Data from 2001 to 2012 shows that, except for 2009, steel prices have historically risen after the Spring Festival, with over 90% of cases showing an upward trend.
While this pricing habit may contribute to the increase, it’s not the only factor at play. Raw material costs continue to play a key role. Iron ore prices have been volatile, influenced by weather conditions in the southern hemisphere, which have disrupted shipments from Australia and Brazil. This has led to a firming of ore prices. Additionally, many steel mills are still using high-priced ore from previous periods, further pushing up production costs.
Looking back, iron ore prices surged dramatically between December 2012 and early January 2013. The price of 61.5% grade Australian PB powder once reached $157 per ton, a massive increase from the 2012 low of $88 per ton—an 78.4% rise. Although prices later stabilized due to reduced demand and pre-holiday stockpiling, they have since rebounded again. As of February 4, the price of 61.5% grade PB meal stood at $151.5 per ton, up 72.16% from the 2012 low.
As production costs continue to climb, major steelmakers like Baosteel, Wuhan Iron & Steel, and Shagang have significantly raised their ex-factory prices, leading to higher market prices. This gap between mill prices and actual market prices is a key driver of the expected price increase in the spot market after the holiday.
Moreover, the mild economic recovery, the resumption of construction activities, and a rise in international steel prices all support a positive outlook for the post-holiday steel market. However, while excitement is growing, it’s important to remain cautious about potential risks.
After the holiday, traders are likely to push prices higher, but the sustainability of this trend depends on whether post-holiday demand can keep up with the price increases. If demand remains strong, traders will likely continue to raise prices. But if demand falls short, steel companies may be forced to cut prices to move inventory.
Recent data shows a significant rise in domestic construction steel inventories. If these stocks aren’t quickly absorbed after the holidays, it could create market pressure. For example, on February 1st, the inventory of building materials in 35 cities reached 8.8319 million tons, up 21.83% from January 4th, when it was just 1.5824 million tons.
In addition to weak demand potentially disrupting the supply-demand balance, steel mills are continuing to raise ex-factory prices to pass on cost pressures. If post-holiday steel prices surge too quickly, there’s a risk that mills might accelerate production to maximize profits, leading to oversupply and putting downward pressure on prices.
Despite these challenges, favorable factors suggest a strong “opener†after the holiday. However, whether the price can make a significant breakthrough ultimately depends on the strength of downstream demand.
Stainless Steel Bolt
TS HARDWARE proudly offers a wide variety of stainless steel bolts in several sizes and styles such as hex head, socket style, carriage, and lag bolts. Most of our inventory is available in both type 18-8 and 316 stainless steel bolts. Type 18-8 are standard grade, while 316 is a superior type often referred to as marine-grade steel. It`s known for its durability against harsh conditions that cause rust or corrosion. While 18-8 and 316 stainless steel bolts have a similar strength composition, restaurants, hospitals, and water treatment facilities are best served by marine-grade products. Checkout our unique collection below, and contact us with any questions or concerns. Our highly-trained staff can help you! Can`t find what you`re looking for? Check out our stainless steel screws for more options.
Stainless Steel Bolt,Stainless Steel Eye Bolts,Stainless Steel U Bolts,Stainless Steel Nuts And Bolts
Taizhou TS HARDWARE Co., Ltd , https://www.shuwengroup.com