The steel market has entered a more volatile phase as the Central Economic Work Conference set a "steady progress" tone for the upcoming year, signaling positive expectations. The National Development and Reform Commission (NDRC) has responded to the impact of large-scale infrastructure projects, leading to a surge in domestic steel demand. However, with the seasonal demand slowdown, trading volumes remain light, and traders are not aggressively building winter inventories. Some product specifications have experienced minor corrections due to this dynamic.
Despite this, the cost support for steel continues to rise, and market sentiment remains positive and stable. As a result, the domestic steel market is expected to follow a "concussive pattern," meaning it will see short-term fluctuations but overall upward momentum. Analysts from the Lange Steel Information Research Center predict that prices will slightly increase in the near term, with long products showing a modest rise and plate markets remaining volatile.
According to their weekly price forecast model, the Lange Steel Composite Index is expected to fluctuate around 149.1, with an average steel price of about 3,880 yuan per ton. The long product index is projected to hover around 162.6, up by approximately 0.7 points, while the sheet index is expected to be around 132.7, also rising by about 0.7 points.
Market surveys suggest that raw material prices are also on the rise. Iron ore prices are expected to climb by 20 yuan, coke prices remain stable, scrap prices increase by 50 yuan, and billet prices go up by 30 yuan. These factors contribute to the upward pressure on steel prices.
Looking back at the 51st week of 2012 (December 17–21), the Lange Steel Composite Price Index reached 148.4 points, marking a 1.01% weekly increase and a 12.93% drop compared to the same period last year. Long product prices rose slightly, while sheet prices remained mixed. Among the 44 standard steel varieties monitored, 28 saw price increases, seven remained flat, and nine declined.
Steel stock levels across the country have decreased again. As of December 21, the total steel inventory in 29 key cities stood at 11.7495 million tons, down 67,000 tons from the previous week. Specific sub-sectors showed varied trends, with rebar and hot-rolled coil stocks declining, while wire rod and cold-rolled coil stocks saw slight increases.
In terms of market behavior, the steel market was relatively sideways during the 51st week. Rebar prices fluctuated, with a small weekly gain after a two-week rally. Positions increased when prices rose, but fell quickly when prices dipped, indicating weak short-term selling pressure.
On the macroeconomic front, industrial electricity consumption in November surged by 7.0% year-on-year, driven largely by heavy industries. This highlights ongoing demand for steel in construction and manufacturing. Fiscal policy in 2013 is expected to focus on urbanization, with increased investment aimed at stimulating growth. Meanwhile, the central bank emphasized maintaining a prudent monetary policy to support financial stability.
Industry news includes a slight decline in crude steel production in early December, as well as anti-dumping investigations initiated by Thailand against Chinese high-carbon steel rods. Downstream demand remains strong, particularly in fixed asset investment, which grew by 10.4% in November.
Shipbuilding activity has slowed, with a significant drop in new orders and completed vessels. However, wind power projects continue to expand, with over 8.52 million kW of new capacity approved across 16 provinces. These projects are expected to boost demand for steel in the coming years.
The National Development and Reform Commission has also approved several major infrastructure projects, including power grid upgrades and western development initiatives, further supporting long-term steel demand. Overall, the steel market remains in a transitional phase, with both challenges and opportunities ahead.
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