Why China's steel prices dropped unexpectedly season?
Review this year the domestic steel market prices, as a good novel, thrilling story, continue, particularly futures prices in April saw stock manipulation, sudden strong continuous harden board, fell again wash dish.But commodity futures is not stock, after all, logic can be fabricated story, but the fact of supply and demand will be thrown out a loud "big mouth".
Mid to late August, the author has twice been writing some questions about the steel market, now recall, the market price for the supply side, to the story of the capacity to continue to rise, but not a reasonable logic will be falsified by the market.When the market began to crazy, and that steel futures and spot prices will hit a record high, the change of supply and demand of lifting the stick again.
One could argue, nearly two days a sharp fall in the futures market price is strongly associated with foreign markets "black swan" event, but there's no doubt about that, the domestic steel market supply and demand are further deterioration.Five varieties since mid-july, the domestic steel social inventory growth for 8 weeks, as of September 9, five varieties of social inventory total reached 9.64 million tons, 13% growth from July 15, 8.52 million tons;With the matching is that steel production enterprise production supply does not decrease significantly.
In terms of macro data, the domestic real estate investment, the new construction area of the cumulative year-on-year growth since may, continuous decline, domestic fixed asset investment growth is also a continuous narrowing, even very strong year-on-year rate of increase of infrastructure investment is a slow down in July.There is no doubt that expectations for the downstream steel market demand is gradually lost, because September is more than half, in 1 to 2 months, the northern area building construction will be affected by the weather turns cold, this time again want to weave the demand of the dream to support the steel market prices, perhaps really is just a dream.
Only for domestic steel exports of 9.01 million tons, in August, from all shrunk dramatically.According to the Shanghai international steel stand survey found that at present China's steel exports to destination price advantage does not exist, compared with the black sea region, Iran and other countries, domestic steel price of the arrival of the goods even more than 20-30 dollars/ton.In addition, 2015 steel export base is very high, when export growth of steel consumption accounted for a large part, but the second half of 2016, steel exports may be compared to the same or even negative, so hard to make contributions to domestic steel consumption volume.Considering the lack of price competitiveness, domestic steel exports in the short term is restrained, so domestic supply pressure is likely to heat up.
Why plank market price will be relatively strong?Sheet relative to the construction steel market, the current domestic market really good downstream demand, auto production base under the background of low last year, the year-on-year rise sharply, the monthly production volume of more than 20% year-on-year growth do let markets cheered, in addition, the electrical appliances production and marketing data is relatively good.Therefore, cold-rolled, galvanized steel varieties such as downstream demand is relatively strong, and as a process - 50% into the cold hot rolled coil plate yield varieties.Around in the first half of the flood, waterlogging and flooding, as flood prevention ability obviously ascending loss and to build houses and infrastructure is probably small, but after bubble water car, home appliance, must have a lot to purchase quantity.
Now, automobile, household appliances, such as enterprise production enthusiasm is higher, some companies even take the initiative to increase steel inventory reserves, leading steel single full, so the plank market price support strength is stronger.In fact for eight weeks social inventories rise is mainly the growth of the rebar inventories, sheet inventory has not changed much, sheet parts dealer inventory even the lowest level in history.
In the late tang shan area steel mills to leak and other areas to capacity plan will influence have how old?The author thinks that tangshan limit production has become the norm, even if the end of the park, the norm is likely to continue, the outside is the strength of the enforcement.In fact, at present tangshan limit production affect supply and demand is not very strong, but once not to leak is sure to fuel supply pressure.Other area to promote capacity plan is more stuck in invalid removal capacity, the actual affect output power co., LTD.
Focus on the future steel price trend, the author thought that need to focus on changes in steel production profit, money will stimulate the manufacturer to increase production.In fact, the high grade iron ore in 2016 have been higher premium, the construction steel manufacturers have hardly profits, but there is no profit is the premise of price of raw materials to maintain the current level.When steel is not profitable, low grade ore charging ratio should be increased, the fundamentals are relatively poor ore prices is also in line with expectations, so the steel market prices will continue to fall is highly correlated with raw material prices.
There is no doubt that today's background, the iron and steel production enterprises would never choose losses still production for a long time, so once the production of iron and steel enterprise profit is very low or negative, we should pay attention to steel mills will choose to suspend production.The author tend to think that steel market prices this year are difficult to deep down, but if the steel mill profits high, short profits, it is worth noting that cannot simply equate to short steel mills profit with empty thread ore more, need to pay attention to the influence of the coking coal, coke.
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