According to statistical data, in July, the monthly output of steel in China increased by 17.58%, which was a significant decline from the growth of output in June. Industry insiders expect that there will be a deceleration in the growth rate of steel production. Although continuous decline is unrealistic, there will inevitably be repetition, but the trend may change.
From the statistics, we can see that the rankings of all types of products and output growth from high to low in July are: hot-rolled plates, cold-rolled plates, ferro-alloys, large profiles , coated plates, hot and cold rolled thin steel strips, and coatings. Boards, growth rates are all above 30%. Although the current production growth rate is concentrated on sheet metal, the market is still relatively optimistic about the plate, and it is not optimistic about long products. The long-term capacity expansion of long products is based on the background of adequate supply. The rapid growth of sheet materials is based on the background of development. Therefore, the supply and demand structure of long products and entry barriers are much lower than those of sheet materials.
As of July, the statistical gross profit for a single month continued to rebound. Affected by the August steel price adjustment, it is expected that the gross profit in August will be slightly adjusted, and then be flat in September. Therefore, steel prices will have a phased high, but the supply and demand environment for steel in the second half of the year will be better than the first quarter of this year. In August this year, the operating conditions of various sub-sectors of the iron and steel industry in China have the following characteristics:
First of all, the domestic price of furnace charge still maintains an exceptionally steady trend. Domestic iron ore prices rose slightly, and it is expected that the price of charge materials will continue to fall in the future, and this is mainly due to the background of falling international raw material prices.
Secondly, due to the adjustment of domestic steel prices and the impact of spot price stability, gross margin of steel prices fell, and the industry’s expectations for third-quarter profits were more optimistic. It is estimated that the average gross profit in the third quarter is basically the same as that in the second quarter. The third quarter profit of the steel companies is equivalent to the second quarter, or it will be better than the second quarter.
Third, the prices of wire rod and rebar began to rebound, and the ring price rose slightly. Recently, rebar and wire rods have shown signs of stabilization. From the perspective of demand, the pull factor is relatively strong, and the probability of further price decline is relatively small.
Fourth, the prices of hot-rolled coils are still falling, and they are expected to stabilize in October.
Fifth, the prices of cold-rolled coils and galvanized sheets began to fall. According to the law of falling, cold rolling and galvanizing are the last falling varieties, and adjustments are basically in place. At present, it seems that by the end of October, cold rolling and plating may have stabilized. In terms of gross profit, the gross profit of cold-rolled sheet and galvanized sheet also showed a slight decrease.
On the whole, the current domestic steel prices have shown signs of stabilization and rebound, rebar has rebounded, and the sheet has just stabilized. Experts pointed out that the steel price trend in the fourth quarter of this year is still mainly stabilizing, mainly because the current Lido Lee’s factors are clearly intertwined, and the reason for making a simple pessimism or optimism is not sufficient. Therefore, the basis for the current stability of steel prices is still there, but if the international steel prices in the later period fall, the price pressure in the later period will be relatively large.
In August, the growth rate of domestic steel production fell by one percentage point to 26.04%, which has been declining for two consecutive months. The high point of capacity increase seems to be in the past. The main reasons are as follows:
The first is the decline in investment in fixed assets. As the investment effect of steel investment is still relatively obvious, the decline in investment demand for steel is at least not a good thing.
Followed by the adjustment of export tax rebates. However, due to the implementation of the policy implementation of the buffer period, but also accounts for 0.6% of the industry's profits, so the overall impact is not significant.
The third is the expected lower international steel prices. At present, the international steel prices are at a high level of adjustment. Recently, the prices of hot-rolled and cold-rolled steel sheets in the United States have been slightly adjusted. In the future, there may be adjustments in international steel prices.
The fourth is the spread at home and abroad. Currently, the domestic and international spreads are still at US$150/ton. Although the impact of export tax rebates is US$13/ton, the effect of export tax rebates cannot still make up for domestic and foreign spreads, and will still attract companies to engage in export activities, and will Create support.
From the statistics, we can see that the rankings of all types of products and output growth from high to low in July are: hot-rolled plates, cold-rolled plates, ferro-alloys, large profiles , coated plates, hot and cold rolled thin steel strips, and coatings. Boards, growth rates are all above 30%. Although the current production growth rate is concentrated on sheet metal, the market is still relatively optimistic about the plate, and it is not optimistic about long products. The long-term capacity expansion of long products is based on the background of adequate supply. The rapid growth of sheet materials is based on the background of development. Therefore, the supply and demand structure of long products and entry barriers are much lower than those of sheet materials.
As of July, the statistical gross profit for a single month continued to rebound. Affected by the August steel price adjustment, it is expected that the gross profit in August will be slightly adjusted, and then be flat in September. Therefore, steel prices will have a phased high, but the supply and demand environment for steel in the second half of the year will be better than the first quarter of this year. In August this year, the operating conditions of various sub-sectors of the iron and steel industry in China have the following characteristics:
First of all, the domestic price of furnace charge still maintains an exceptionally steady trend. Domestic iron ore prices rose slightly, and it is expected that the price of charge materials will continue to fall in the future, and this is mainly due to the background of falling international raw material prices.
Secondly, due to the adjustment of domestic steel prices and the impact of spot price stability, gross margin of steel prices fell, and the industry’s expectations for third-quarter profits were more optimistic. It is estimated that the average gross profit in the third quarter is basically the same as that in the second quarter. The third quarter profit of the steel companies is equivalent to the second quarter, or it will be better than the second quarter.
Third, the prices of wire rod and rebar began to rebound, and the ring price rose slightly. Recently, rebar and wire rods have shown signs of stabilization. From the perspective of demand, the pull factor is relatively strong, and the probability of further price decline is relatively small.
Fourth, the prices of hot-rolled coils are still falling, and they are expected to stabilize in October.
Fifth, the prices of cold-rolled coils and galvanized sheets began to fall. According to the law of falling, cold rolling and galvanizing are the last falling varieties, and adjustments are basically in place. At present, it seems that by the end of October, cold rolling and plating may have stabilized. In terms of gross profit, the gross profit of cold-rolled sheet and galvanized sheet also showed a slight decrease.
On the whole, the current domestic steel prices have shown signs of stabilization and rebound, rebar has rebounded, and the sheet has just stabilized. Experts pointed out that the steel price trend in the fourth quarter of this year is still mainly stabilizing, mainly because the current Lido Lee’s factors are clearly intertwined, and the reason for making a simple pessimism or optimism is not sufficient. Therefore, the basis for the current stability of steel prices is still there, but if the international steel prices in the later period fall, the price pressure in the later period will be relatively large.
In August, the growth rate of domestic steel production fell by one percentage point to 26.04%, which has been declining for two consecutive months. The high point of capacity increase seems to be in the past. The main reasons are as follows:
The first is the decline in investment in fixed assets. As the investment effect of steel investment is still relatively obvious, the decline in investment demand for steel is at least not a good thing.
Followed by the adjustment of export tax rebates. However, due to the implementation of the policy implementation of the buffer period, but also accounts for 0.6% of the industry's profits, so the overall impact is not significant.
The third is the expected lower international steel prices. At present, the international steel prices are at a high level of adjustment. Recently, the prices of hot-rolled and cold-rolled steel sheets in the United States have been slightly adjusted. In the future, there may be adjustments in international steel prices.
The fourth is the spread at home and abroad. Currently, the domestic and international spreads are still at US$150/ton. Although the impact of export tax rebates is US$13/ton, the effect of export tax rebates cannot still make up for domestic and foreign spreads, and will still attract companies to engage in export activities, and will Create support.