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Does the steel price have the sustainable increase trend or not?

    Just a month, steel industry generally had poor earnings, the market boss retreated. Because the main steel industry increase and steel production slow down, social reduced inventory and other factors, the drop of steel price will reduced, and have been gradually stabilised. The “winter” pessimism of steel pipe have thawed by the above influence factors. 
    These good element support the steel price to rebound
    The author investigated that, the production of crude steel and steel decline that ease domestic supply pressure steel market. Steel market’s “remove inventory” continue, parts of the market individual specifications appear resources shortage. So part of the steel enterprises’ back production plan is put forward in succession, iron ore procurement has increased. Iron ore market present a rebound trend.
    Driven by the above positive factors, the steel market price is going to increase. Price market data show that by the end of November 15, the main market 20 MM level 2 steel bar and Q235B3. 0 MM hot coil average price have increased154 yuan/ton, 58 yuan/ton than on October 24. By November 11, the steel bar, wire, medium and cold rolling, hot rolling five varieties total social inventory have 13.428 million tons, have “remove inventory” 1.762 million tons than October 8.
    At the same time, previously appeared the slump in iron ore prices since early November strong also rebound. Import price index ore show that by the end of November 15, 63.5% India powder grinding price is $147 / mt, a previously appeared on October 31, the lowest point of  $129 / mt, up $18 / tons. With the bounce of the ore price, steel plant has also put forward production plan. But because it now for iron ore purchasing steel remain cautious commonly, purchase quantity is only for daily consumption.
    How long does the steel market price rise could continue?
    With the support of positive factors, steel market appear better trend. But the better situation can last long? To this, the expert consider that it may rise unattainable. 
    First cost does not support the price increase of steel. Steel price drop drive the raw material of the steel of deep adjustment, for most has the high price of ore finish digest private steel enterprises are one kind of positive news. But state-owned steel decision always delayed relatively slow, to digest the high cost and high mining stock still need some time. In this situation, the private steel enterprises can quickly regains vigor, carry the advantage of low raw materials to the battlefield. If state-owned steel enterprises pull up price, the private steel enterprises as profits space increases productivity, which drive up the price of production factors state-owned steel enterprises prices to offset the profits, and ultimately, it’s the loss outweights the gain.
    Second needs do not support the price increase of steel. On the one hand, China and even the world economic slowdown in the second agent of the trend has been established, macro demand must be gradually decline. On the other hand, micro demand for downstream real estate’s continuous control crushed, maybe the worse situation has not come true, the real estate on the steel demand will undoubtedly fall. In addition, seasonal factors also restricted the steel price increases.
    Third, the funds does not support steel price rise. The falling prices, the biggest loss is the first level agency who committed to do marketing dealers for the steel enterprise, and the speculators who is pledging of financing by steel, then the inside futures speculators. As the saying goes: lightning never strikes twice double whammy. Often most of the boss have the three shots, the atrophy of fund or even leave will undoubtly make the field worse which is originally under the steel trading circulation ! No money to promote the market will not have an influence on it.

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