Eliminate or reduce the production capacity of steel production, steel prices rise

         In the first half, the domestic steel bars market environment is more complex.As China’s economic growth slowing, domestic demand has slowed down.Meanwhile, the fragile world economic recovery, export growth instability.Affected by the tightening of monetary policy, financial aspects of the market tight.But steel production hit a record high, average daily production remain at 190 million metric tons, crude steel production exceeded 350 million tons in the first half, accounting for half of world crude steel production.In a complex market environment, the domestic steel market prices rose slightly in shock. 
         Domestic steel market has stabilized, but taking into account domestic and international macroeconomic and financial capital, less stable environment, the major steel industry into the off-season while limiting the production of steel is difficult to scale, the recent upward price still face greater obstacles.However, supporting factor in the adjustment process will become more apparent.From a macro point of view the policy side, CPI target this important late into the third quarter is expected to gradually decline, tightening loose more likely.Support from the cost factor, although the deposit of iron ore price is expected to decline, but the agreement prices remain high, the cost of support in an inflationary environment plays a prominent role.From the demand point of view, the major steel industry requires the third quarter, post-season preparation for the next production, demand is expected so heavy volume, coupled with the protection of housing starts peak of the arrival of the domestic steel market will therefore be lifted.Overall, the second half of the domestic steel market prices are expected to stabilize in the shock or even increased.
         First, the terminal year growth rate of demand there is still little decrease signs.Currently, the state does not relax the regulation of real estate signs, real estate climate index in the first half was the turning point, new projects and also an area of ??high housing sales down, in the second half the situation is still grim.Moreover, not only is the real estate industry pressure significantly, with the power supply, small and medium enterprises financing difficulties, labor shortage, rising inventories and other difficulties highlighted, the callback still facing the pressure of industrial growth, including machinery, automotive industry, including short-termwill continue within the weaker patter
          Second, export growth, greater resistance.First, the current no significant improvement in overseas demand, the international steel channel angles market fell slightly in phase, in the shrinking spread abroad; Second, since the reform of RMB exchange rate with high foreign exchange earnings; three of China’s major steel exporting countries, especially India, Vietnam, thisemerging market countries, to accelerate the expansion of steel production capacity, China’s steel exports in the future to enhance the inhibition.
         Third, the global commodity price movements, there is a big variable.Because of the US-led concerns weak economic growth in developed countries, and the prospect of the debt crisis of uncertainty, the global economic recovery is still fragile, European stock markets and commodity price movements, there is a big variable.Since the second quarter, U.S. stocks finished lower, the three major U.S. stock indexes the Dow fell below 12,000.Weakening in the stock market at the same time, international commodity futures generally weaker, with the largest decrease in crude oil, current price about 95 dollars / barrel, higher point total drop rate is 15 percent.


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