“Industry expert analysis believes that the trend of steel prices in October mainly depends on the implementation of energy-saving emission reduction and power-restricted production restrictions. If implemented strictly, steel prices may rise. If it is relaxed, it does not rule out the possibility that steel prices will continue to fall. ."
The power-restricted production restriction policy has been implemented for half a month, and enforcement has been compromised. The overall demand for steel this year is not as good as last year. Steel producers have to lower their ex-factory prices after the production limit is expected to be digested. Steel traders expect the October demand to be very different.
Limited production policy is discounted
After the power-restricted production restriction policy was implemented, the average daily output of domestic steel mills rose in September. According to the latest data from China Steel Association, the national crude steel output in the first half of September was a net increase of 15,000 tons to 1.697 million tons from the end of August.
Analysts believe that the increase in daily output of crude steel in the country in early September is likely to be due to the fact that the enforcement of power cuts and production restriction policies has been compromised.
The resumption of production of some steel mills in Tangshan has become an open secret. Many steel grade 1 dealers responded that steel shipments did not change compared with August.
Mr. Lei, deputy general manager of Beijing Ordnance Materials Co., Ltd., told Lange Steel News Center that the limited power production restriction policy has little effect on the decline of steel mill production, and the demand is not satisfactory. Therefore, the inventory decline rate is not fast, especially Beijing stocks are almost no Variety. Zhang Wenjie, deputy general manager of Beijing Labor Service Materials Co., Ltd., and Li Mingyi, business manager of Beijing Zhihengda Business Co., Ltd. also expressed the same opinion.
Limit production is expected to be reduced by the digester steel factory prices
Affected by ** and electronic discs, steel prices are increasingly influenced by information expectations. The steel price rose sharply in advance on Sept. 6 and showed the expectation of tight resources in the restricted production restriction policy. After this expectation was gradually digested by the market, the steel traders had to lower the market price, and the steel makers did not dare to significantly increase the price. The ex-factory price, even the steady decline in the ex-factory price.
Shagang sets the ex-factory price at the end of September in September 21. The price adjustment is based on the "Shanxi Steel's pricing policy for the first half of September, September 11," and the price of rebar remains unchanged. The current price of the 16-25mm HRB335 thread is 4530. RMB/ton, Ф16-25mmHRB400 thread ex-factory price is 4650 yuan/ton. Since September 21st, Shandong Iron and Steel Group's rebar price has dropped by 100 yuan per ton, making it the first major state-owned steel mill to lower prices in September.
Prior to this restriction of limited power production, the increase in steel prices was too high. Zhang Wenjie, deputy general manager of labor services materials, believes that the steel mills have lowered their factory prices in a steady manner, and the current market price should be a reasonable price.
Relatively insufficient demand for excess production
The Ministry of Housing and Urban-Rural Development announced on the 20th that by the end of September, all housing construction projects for affordable housing must be completed. The completion or completion of the project at the end of the year should reach more than 60%. However, it is expected that it will only be able to pull the demand for 2 to 6 million tons of steel.
"The protection of housing demand for steel and real estate steel demand, compared to the ratio is still very small, so the protection of housing construction on the steel demand in the fourth quarter has little effect." Zhang Wenjie said, Lei also expressed the same view.
According to data from the National Bureau of Statistics, domestic real estate investment in January-August 2010 totaled 2.84 trillion yuan, up 36.7%, and in January-August 2010, the area of ​​new housing starts was 1.048 billion square meters, an increase of 66.1% year-on-year.
Analysts believe that due to high output of steel mills this year, inventory remains high, despite the fact that real estate investment this year has increased compared to last year, compared to the increase in steel mill production demand is still insufficient, so steel traders will always complain about poor demand There are even steel traders jokingly saying: "This year's demand has been abducted by prices, and demand will only appear when prices rise."
Zhang Wenjie analyzed that China's economic growth rate will slow down this year, real estate demand for steel products will only take up 40%-50%, and fixed assets such as machinery investment will also account for about 40%. However, the investment in machinery this year has been significantly reduced, and infrastructure construction such as railways and highways has also come to an end in 2008 and 2009.
“So I think the overall demand this year is even worse than last year, and the ex-factory price of steel mills will also be adjusted back in October.†Zhang Wenjie said.
October steel prices vary greatly
According to the Lange Steel Network information monitoring data, on September 17, the rebar inventory of 29 key cities in China was 5,274,200 tons, a decrease of 149,300 tons compared with last week and a decrease of 2.75% on a week-to-week basis. The rebar stocks in Beijing on the 17th were 388,800 tons, a decrease of 14,800 tons from the previous week and a decrease of 3.71% on a week-to-week basis.
Zhang Wenjie believes that the decline in inventory is not obvious that the demand is very general, the terminal demand has not reached the steel traders' expectations.
Lei analysis believes that the small decline in social stocks may be due to reduced production of steel plants is not obvious, if so late steel prices may also stabilize recovery. However, if the demand for the terminal is really not good, the traditional fourth quarter is the demand off-season, and it is even more difficult for steel prices to stabilize in October.
However, some traders are still full of confidence in the market conditions in October. Zhiming Li Group Business Manager Li Mingyi said, “The effect of energy saving and emission reduction on the reduction of steel mill production will appear in October. Even if there is a small number of steel mills to resume production, and the impact on inventory is small, the social inventory in October will certainly decline. Li Mingyi said, "The demand in October is similar to that in September. As long as the country continues to implement the power-restricted production restriction policy, there will be room for upward movement in steel prices in October."
Recently, the government has tightened its policy on restricting power production. In recent days, Hebei Province has strictly implemented the administrative responsibility system, strengthened supervision and inspection, and implemented a "one-vote veto." From the beginning of September to the end of December, the Hebei provincial government will send five inspection teams to 11 community cities to conduct a four-month energy-saving and emission reduction inspection.
However, Zhang Wenjie analyzed that energy conservation and emission reduction policies not only have a direct impact on the upstream industries such as the steel industry, but also lead to a decline in the demand for raw materials for downstream finished products. As a result, the output of steel mills will decline, and demand for terminals will also decrease.
Zhang Wenjie told the reporter of Lange Steel News Center very affirmatively: “In the fourth quarter, iron ore prices will drop by 10%, the cost will stabilize, and the limited power production will reduce terminal demand. In the fourth quarter, the decline in steel prices is inevitable!â€
On the 21st, the rebar ** at the Shanghai ** Exchange opened lower and opened lower. Among them, the main rebar 1101 contract morning session opened at 4,370 yuan / ton gap, followed by a downward trend in oscillation, closing price of 4,317 yuan / ton, down 71 yuan / ton, a decrease of 1.62%.
"** Go green to show that everyone is not optimistic about the post-holiday market." Yue Huan, analyst at Zhejiang Tianmu Steel Trading Co., Ltd. said.
Industry experts believe that the trend of steel prices in October mainly depends on the implementation of energy-saving emission reduction and limited power production. If strict, the steel price may go up. If there is some relaxation, the possibility that steel prices will continue to fall may not be ruled out.