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The contradiction between supply and demand in the steel market has improved. Looking forward to the spring market

  • Categories:Company News
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  • Time of issue:2019-07-27 13:51
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(Summary description)Every year from March to May, it has been regarded as the traditional peak season of the steel market in the first half of the year. However, in March this year, while major steel companies raised the

The contradiction between supply and demand in the steel market has improved. Looking forward to the spring market

(Summary description)Every year from March to May, it has been regarded as the traditional peak season of the steel market in the first half of the year. However, in March this year, while major steel companies raised the

  • Categories:Company News
  • Author:
  • Origin:
  • Time of issue:2019-07-27 13:51
  • Views:
Information

Every year from March to May, it has been regarded as the traditional peak season of the steel market in the first half of the year. However, in March this year, while major steel companies raised their ex-factory prices, the demand of the steel market failed to increase as expected. Traders have been looking forward to it. The spring market has not yet appeared. In the blink of an eye, in April, traders expect steel market to usher in a veritable " Silver IV. "
Steel market turnover improved significantly at the end of March
After a month of continuous decline, at the end of March , the steel market ushered in a long-lost price increase, coupled with rising trading volume and declining inventories, allowing traders to see the hope of a rebound in the steel market. In the constant expectation of traders, the demand for steel used in the downturn since the Spring Festival has finally begun to exert its strength. “The demand in the steel market has improved. The transactions in these days have obviously been good.” Bai Jinglong, deputy manager of the marketing department of Beijing Chaoyin Shunde Trading Co., Ltd. said that after the two sessions, with the large-scale construction of outdoor construction projects , in the process of market inventory decline With the complete start of market demand, the market conditions have clearly improved in recent days. "As of the end of March, we have exceeded one billion sales. " Wang Yongfu, chairman of Beijing Pude Metals Group, said that we can create a good performance this year. We did not lose money in January and February, and entered in March. A normal period of development. Moreover, the current steel trade industry does not make money as everyone imagines, and many small and anonymous enterprises have gradually grown bigger in this process .
Prior to this, the steel market demand in March failed to start as scheduled, far from the expected market recovery .
In early March, China's steel market continued to decline under the stimulus of the “National Five” rules to strictly control real estate, coupled with the continuous suppression of steel stocks.
Until March 20th, the construction steel market showed a wave of spurts and then the market continued to rise. The rising momentum lasted for a few days, but it quickly turned back and fell. "The steel market in the near future has been fluctuating repeatedly. It is rising today and falling tomorrow. It is like giving you a sweet date today, and you will be slap in the face tomorrow." Some steel traders even complain that this market is like "Ado can't afford it" and thinks that the market is real. The warming is estimated to be in mid-April.
This spring, the market has been slow to see, and some traders believe that because of the national two sessions, many governments have temporarily restricted the progress of outdoor projects due to various considerations. Most traders report that with the end of the two sessions, various controls are released, the climate is picking up, and specific policies are implemented. The downstream industries of the steel market may enter the peak period of construction, which may usher in the real release of steel demand, thus driving steel. The price stopped falling and rebounded.
The contradiction between supply and demand in the steel market has improved
With the gradual release of downstream steel demand and the acceleration of steel destocking process, these positive signals have brought certain confidence to the steel market. Therefore, the trader’s mentality has also improved, similar to the previous steel market’s downturn. Significant reductions in panic operations will all contribute to the steady recovery of steel prices. "The price of steel has risen a lot in recent days, and the transaction is not bad." Wu Di, deputy general manager of Beijing Zhongyuan Guanglu Commerce and Trade Co., Ltd. told reporters that he was in a good mood these days and felt that the steel market has slowly improved.  And he is optimistic about the April and May market expectations.
The foothold of steel prices will eventually return to the steel market supply and demand changes. Compared with previous years, the destocking of steel in China was significantly delayed in 2013. This was mainly due to the impact of the national "two sessions" change. In the future, as the downstream terminal industry starts to accelerate, the speed of de-stocking of steel in the later stage will be further accelerated. Although the current inventory is still at a high level, the suppression of steel prices should be appropriately relaxed.
According to the statistics of Lange Steel, as of March 29, the total social inventory of construction steel in 29 key cities nationwide was 12.7191 million tons. From the growth rate of stocks of various varieties, the rising speed of stocks such as wire rod, rebar and coiled snails have slowed down, indicating that downstream construction projects have started and market demand has slowly recovered.
At the same time, steel mills showed signs of production cuts and supply pressures eased. At present, some steel mills have increased their inspection and maintenance, and the enthusiasm of steel mills to limit production and avoid risks has increased significantly.  Some small and medium-sized steel mills have also adopted active measures to limit production. Therefore, it is a high probability event that crude steel production will begin to decrease in the future.  It is conducive to the development of steel destocking process.
According to the statistics of China Steel Association, the average daily output of crude steel of member companies in the middle of March was 1,677,600 tons, and the national crude steel output was estimated to be 2.0637 million tons, down 1% from the previous month. From the real situation of the market, due to the loss of orders and serious losses, the crude steel output of key enterprises in early and mid-March has declined. Some small and medium-sized steel enterprises have also increased the intensity of inspection and production reduction, and the output adjustment will gradually be reflected in the later period.
Of course, there are also a few traders who are worried that the local versions of the country's five housing control rules are still being introduced one after another, and the influence of other news may appear from time to time. At the beginning of the release of downstream terminals, there is still a certain amount of inventory to be consumed. The purchase of steel is also driven by price, and the release of demand for terminals is still in an unstable stage. Therefore, the market still needs to be treated with caution.
April steel market has improved
For the domestic steel market in April, most steel traders believe that the current market bearish situation is basically exhausted, the two sessions have ended, the new government will come out a series of policy implementation rules, many of the previously determined investment projects are starting soon, from the end of March At the beginning, ** is late in mid-April, and as the various projects enter a substantial construction phase, the long-held demand for steel will also usher in a large-scale release. “Our daily shipments have returned to normal levels and even higher, and all end users have ordered our goods.” Xiao Wenting, general manager of Beijing Wanshunfa, said: “There is almost no room for steel prices to fall. The demand for steel will increase gradually. I think there should be a wave of prices in April, which has a great relationship with the decline in inventory. The price may hit 3800 or higher."
Some steel traders believe that in April, the temperature in various places will gradually rise and warm, which is the **** season for construction projects. This year, the municipal infrastructure will be ushered in the climax of centralized construction. According to incomplete statistics, there are currently more than 70 subway lines under construction in the country, with a total investment of more than 800 billion. If the approved projects are added, the investment amount will be more than 1.5 trillion yuan. Therefore, with the intensive construction of subway projects in various places, steel demand will be released, and steel prices will rise again.
This year's seasonal demand started late, and the construction market is gradually active after the two sessions. It is expected that the infrastructure will continue to recover after the second quarter, but the intensity will be milder.  In the interview, most traders said that the daily volume of steel transactions has basically recovered to the normal level of last year, and this year's peak season may be postponed to May to June.
In this regard, Lange Steel Network Information Director Ma Li believes that the current external environment is gradually improving, the pressure on the steel market for steel futures and the spot itself is gradually decreasing, and demand is gradually starting, especially in the past seven years, domestic steel prices in the spring There will be a decent rise in the market, and this year will be no exception. Although steel prices will be repeated in the short term,  the overall steel prices are fluctuating and bottoming, and there may be rising prices at any time. ** may appear in early April. However, the space for steel prices to continue to rise at the current price level is relatively limited. It is expected to be around 200~300 yuan, and the overall price increase is less than in previous years.

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