The price of raw materials has been reduced and the profit of steel mills rise

In the near future, due to factors such as production restriction and inventory decline, steel price has strong support. Industry insiders also revealed to reporters that steel mills' profits have improved significantly in the near future. From the perspective of raw material end, the domestic coke price has fallen by 100 CNY/ton since the middle of October. Iron ore market also fell in a weak position. Influenced by factors such as environmental protection and production restriction in autumn and winter, most steel enterprises reduced raw material procurement. As of November 11, the proctor's 62% ore index fell to $78.45/ton, down 14.78% from mid October. The production cost of steel enterprises has been greatly reduced. According to the follow-up calculation of xiben.com, as of November 12, the steel production cost index was 3279 CNY/ton. On that day, the sales price of screw steel in Jiangsu, Zhejiang and Shanghai market was about 3800 CNY/ton, and the gross profit of the Yangtze River Delta region's long flow steel enterprises reached 500 CNY/ton. The profit level was significantly increased compared with the previous period. In addition, according to statistics of Zhongtai securities, the gross profit of hot rolled coil (3mm) has increased by 86 CNY/ton recently, with the gross profit rate rising to 10.28%; the gross profit of cold rolled coil (1.0mm) has increased by 67 CNY/ton, with the gross profit rate rising to 4.06%; the gross profit of deformed steel (20mm) has increased by 123 CNY/ton, with the gross profit rate rising to 19.33%; the gross profit of medium and thick plate (20mm) has increased by 61 CNY/ton, with the gross profit rate rising to 7.14%. According to the iron and steel team of Zhongtai securities, the current short cycle of destocking is in the bottom area, and the expected recovery brought by the strong demand will push the steel price to rebound, and the steel stocks are also expected to have a staged rebound.