Weak situation of liquid oxygen in steel storage in winter
Since December, the enthusiasm of domestic steel production enterprises to increase production has increased due to the joint influence of maintaining supply and stabilizing prices, the recovery of demand in the off-season and the phased resumption of production. The daily average output of crude steel, pig iron and steel all showed a trend of significant recovery on a month-on-month basis. According to the data of the National Bureau of Statistics, in December 2021, the average daily output of crude steel in China was 2.78 million tons, up 20.3% month-on-month; The daily average output of pig iron was 2326000 tons, up 13.0% month-on-month; The average daily output of steel was 3.663 million tons, up 8.8% on a month-on-month basis.
"Winter storage" is the most frequent word in the steel industry since the beginning of winter. Since December 2021, steel mills have successively issued "winter storage" notices to stimulate market enthusiasm. The iron and steel market as a whole shows a trend of stability and strength. However, the liquid oxygen market has a general enthusiasm for trading, and its procurement is in a rigid demand. The overall market continues to be weak. According to data monitoring by Zhuochuang Information, as of Thursday, the average price of China's liquid oxygen market was 404.67 yuan/ton, down 4.9% month-on-month and 33.79% year-on-year.
Since January, the liquid oxygen market has been mostly weak and volatile. Although there has been a short-term rebound during this period, the price has mainly fallen due to the limited follow-up of substantive demand. With the distribution of major enterprises such as Benxi Steel and Angang Steel in Liaoning Province, the increase of market supply is obvious, the demand is weak, and the price fluctuates downward. The mainstream ex-factory dropped to 400-450 yuan/ton, 15.84% lower than the previous month. The control of Tangshan area has been relaxed, the air separation load has been significantly increased, and the supply of liquid oxygen has increased, but the market has not received a large amount of goods for the time being. Under the pressure of shipment, the price of liquid oxygen has declined in a weak way, and the mainstream delivery in northern Hebei has dropped to 280-450 yuan/ton, down 10.98% month-on-month. After the New Year's Day in Jiaodong, Shandong Province, the trading atmosphere has improved, and the price has risen to 400-550 yuan/ton. However, as the trading atmosphere has declined, the shipment has slowed down, and the price has declined in a weak way, and the mainstream delivery has dropped to 350-420 yuan/ton. The purchasing enthusiasm in Jiangsu is limited, and partial shipments are under pressure. The main delivery is based on price exchange. Today, the mainstream delivery is reduced to 350-450 yuan/ton, down 15.79% month-on-month.
After entering 2022, except for a few regions in Hebei, Shandong, Shanxi and Henan within the "2+26" region, which have the requirements for production reduction, there are basically no relevant restrictions in other regions. The enthusiasm of the steel plant for production is moderate. At present, the supporting air separation system of the steel plant is mostly restored to normal, and the supply of liquid oxygen is abundant. However, with the arrival of the traditional Spring Festival, most of the long-process steel plants are in normal production, while the short-process steel plants have entered the shutdown and maintenance stage, and the demand is about to enter the "freezing point". At the same time, the market air separation load may fall, and the market will enter a weak situation of supply and demand. Zhuochuang Information believes that the price of liquid oxygen continues to be weak and volatile, and the price falls to the low point in the year during the Spring Festival.