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Domestic steel market will continue to...

        Market review analysis In August, the domestic steel market overall weak consolidation. Entered in August, by the economic data a substantial decline in the macro level policies of bad influence, steel futures Powei even low innovation, billet prices is dropped to the lowest 8 years; focus in early August steel prices of crude steel Nissan and steel stocks both rising, supply pressure increased again; effect of constrained by high Wen Yuji and in some industries leave, sluggish downstream demand, steel spot market continued to fall, building materials market, a larger decline in. Closing on the 26th, the market in the province level 3 rebar prices 2870-2890 yuan / tons, than last month fell 200 yuan / tons. 3200-3260 specifications thick hot rolled coil prices yuan / tons, than last month fell 90 yuan / tons; medium plate prices $3150-3210 / tons, than last month fell 80-120 yuan / ton; H type steel small and medium size price lattice 3070-3100 / tons, general specification, price $3060-3090 / tons, than last month fell 20 yuan / ton; 45# steel prices 3240-3270 yuan / tons, than last month fell 50-60 yuan / tons.
Two, market trends forecast
       In July of investment, industrial increase value, consumption growth were lower than expected, reflecting weaker domestic demand, micro stimulus policy effect is not significant, the underpinning policies more frequent that economic growth of endogenous power is weak; current manufacturing industry needs to be improved, but it is difficult to hedge against the real estate investment growth decline for consumption of steel drag; money is tight situation has no improvement, in order to prevent the economy continues to slow down and later expand stimulus even cut interest rates or RRR will increase the likelihood. In early August crude steel production rebounded slightly, late is expected to continue to rise; steel, coal mine futures tumbled, raw materials market weakness still; leading steel price in September the overall policy unchanged. The current steel market after the continuous consolidation and then choose to turn down, short-term downward trend has been formed, in the effects of policy stimulus in the fall, real estate downturn of the situation to change, industry, money is tight situation, bearish sentiment in the market is still strong, is expected to in September in the domestic steel market will continue to seek the bottom.
Three, the impact of the domestic steel market factors:
       1, macroeconomic data growth rate down, the effect of micro stimulus is not significant. July, M2 grew 13.5%, the growth rate was lower than the previous month and last year 1.2 and 1 percentage points. July RMB loans increased by 385200000000 yuan, an increase of less than 314500000000 yuan, a record low since 2009. Electricity consumption in the whole society grew by 3%, the growth rate fell sharply and hit a 16 month low, confirms that the economic recovery is insufficient. July national scale industrial added value grew by 9%, down 0.2 percentage points from the previous month. In July of investment, industrial increase value, consumption growth were lower than expected, reflecting weaker domestic demand, micro stimulus policy effect is not significant, the underpinning policies more frequent that economic growth of endogenous power is weak.
       2, with the steel industry growth continued downward, late demand is not optimistic. 1-7 month national fixed asset investment grew 17%, the growth rate fell 0.3 percentage points over 1-6 months, manufacturing investment growth fell 0.2 percentage points to 14.6%, real estate investment continued to decline 0.4 percentage points to 13.7%. 1-7 month housing new construction area fell by 12.8%, a decline narrowed 3.6 percentage points; June auto sales were down 7.29% and 12.34%. Although the supply and demand has improved, but the consumer and investment growth slowed, especially the current downturn in the property market, real estate investment growth will continue to decline, with the gradual end of the high temperature weather, refrigerators, air conditioners and other home appliances sales into the off-season, the latter will inhibit the release of steel demand.

       3, iron and steel production rebounded, the latter will remain high. National Bureau of statistics data, 1-7 months of China's crude steel production was 480760000 tons, an increase of 2.7%; in July, crude steel production was 68320000 tons, an increase of 1.5%; in August the national crude steel production was 1829500 tons, 0.53%. At present, the steel mills still have profit margins, production enthusiasm remains high. From the blast furnace operating rate, in mid August, Tangshan area blast furnace operating rate of over 93%, capacity utilization is maintained at more than 96% high, slightly higher than in early August, is expected to remain high in late.
4, the raw material market weak downward, steel price support weakened. In August, the price of iron ore, coal and coke market weakness down, run steady. 26 iron ore Platts index $93.17 this month, the average price of $95.73, down $2.56. Shanxi two metallurgical coke main mainstream factory 860 yuan / ton, and the end of 7 flat; Tangshan general carbon billet price 2580 yuan / ton, compared with the end of 7 fell by 120 yuan / ton. As of August 22nd, the country's 41 major port iron ore inventory of about 110800000 tons, compared with last week, an increase of 130000 tons. At present, there is no obvious signs of iron ore demand, coupled with the lack of capital in the iron and steel enterprises has not been significantly improved, is expected to steel mills in raw material procurement will remain cautious, are not conducive to the good operation of the mine price.
       5, steel social inventory continued to fall. Until August 22, the main market in the five varieties of steel social inventory for 1250.15_wan million tons, less than last week 8.35 million tons, compared with the same period last year to reduce 244.84 million tons, inventory for 25 consecutive weeks to lighten up. At present, the main city of the main city of the total inventory of 5606800 tons of steel, wire stock is 1401200 tons; the total amount of hot rolling stock is 2873200 tons; cold rolling stock 1471800 tons; the total inventory of 1148500 tons. Early high temperature weather construction is blocked, the manufacturing sector, the steel social inventory week has slowed down, the latter seasonal demand recovery, stocks have further lower the possibility.
       6, the leading steel price unchanged. Baosteel, Baosteel, Shougang, River steel prices in September remained stable, Wuhan Iron and steel due to the full order, all varieties rose 20 yuan / ton, trying to stimulate the market rose. Leading to flat steel in September policy, reflecting the demand for steel mills on the late not optimistic expectations.

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