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 raw material side, the domestic coke price has fallen by 100 yuan / ton since mid 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 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, as of November 12, the steel production cost index was 3279 yuan / ton. On that day, the sales price of screw steel in Jiangsu, Zhejiang and Shanghai market was about 3800 yuan / ton. The gross profit of changliucheng steel enterprises in the Yangtze River Delta region reached 500 yuan / ton. The profit level was significantly higher than that in the earlier stage.

According to the statistics of Zhongtai securities, in the near future, the gross profit of hot rolled coil (3mm) has increased by 86 yuan / ton, with the gross profit rate rising to 10.28%; the gross profit of cold rolled coil (1.0mm) has increased by 67 yuan / ton, with the gross profit rate rising to 4.06%; the gross profit of deformed steel (20mm) has increased by 123 yuan / ton, with the gross profit rate rising to 19.33%; the gross profit of medium and thick plate (20mm) has increased by 61 yuan / ton, with the gross profit rate rising to 7.14%.

The iron and steel team of Zhongtai Securities believes that the current short cycle of destocking is in the bottom area, and the expected repair brought by the strong demand will push the steel price to recover from oversold, and the steel stocks are also expected to have a staged rebound. （From LGMI)