Last week, in the domestic steel price rise after the mild, clinch a deal also appeared difference. Although downstream demand still not get better, but the price of steel companies to rise but see the hope. And at the moment when beginning this month, the businessman collection has alleviate pressure, pull up intend to are becoming stronger. By last weekend, although market clinch a deal to continue not free, but the domestic steel inventory is mainly to decline, the space of the downlink steel price has very limited.
Although from last week HSBC bank of China announced on May manufacturing PMI final value view, has dropped to 48.4, continuous 7 months atrophy, and in RongKu watershed below 50, shows that the Chinese economy slowing growth rates continued. According to data shows, the new order is total April falling faster, new export business is also reduced, failed to continue the trend of increase last month. PMI final value fell, a lot of people think, the domestic economy or will continue to drop, but, I think, of the PMI data downward in fact they are not completely is a bad thing, at least cause policy further relax, or further accelerate the stimulus policy appearing and carry out the possibility.
We know, the steel market always get rid of "stumble endlessly" the situation, no matter how to pull up merchants, policy news how to boost, volume can expand, but the good news is, in the macro news intensive bombing, steel trading business confidence has finally, boosted by the weekend, the domestic steel prices have already started to stabilising, a modest rise in parts of agents.
The author thinks that, steel price to reason, there is a factor can't be ignored, that's inventory. It is understood that the rising price of domestic steel this two months, domestic stock has been to drop. Although downstream demand not expected good, deal also generally, however, the terminal procurement is constant, therefore, the domestic steel stocks have been falling state.
According to information, deadlines, weeks steel social total inventory drop 1.1% to 15.615 million tons, 6.825 million tons of thread inventory reduction of 1.2% a week before the drop 3.1%; Wire 1.83 million tons of 1.5% reduction, a week before the drop 3.7%; 3.772 million tons of hot rolling down 1.3%, a week before the drop 1.7%; 169.1 tons of cold rolling down 0.5%, a week before the drop 0.8%; 1.494 million tons of plate reduction of 0.8% 1.0% before a girth. From the market feedback that national accelerate great project examination and approval, the influence of the progress of the good news last week, terminal purchasing enthusiasm slightly ascending, last week the varieties are stock has declined, the businessman generally no inventory pressure, price cut will begin to diminish, all in waiting.
The demand side, in June, with the increase of investment, and a number of major project approval and start work, certainly will will pull steel demand. So, we think, June endorsement or at any time in the resilience of the possible. Although these good policy really implement distance and pull steel demand, there is a process. But, June is a crucial period, the government increased infrastructure and a batch of super large industrial projects investment measures, no matter how to market will a certain stimulation, the businessman if confidence restored to market outlook, so pull up the push of mentality, in June, steel price may rise into the channel. But if downstream demand still can't keep up with, the light by news stimulation, rebound also won't support for a long time, but, on the other hand also has "buy or not to buy up fall" psychological support, so, as long as a bounce steel price momentum, the businessman strong, so the downstream purchasing or is driven.
This, of course, have to look at the hands of the loose money business degree. According to information, in May, fall in commodity prices and weak demand pushing price accelerated fall back, by PPI annulus is turned negative, year-on-year drop to 1.5%, in addition, there are many agencies in May compared to predict CPI or further drops to 3.1%. Recently, many analysts all pointed out that the sluggish economy, plus the level of prices fell back, with prices for monetary authorities to stimulate means created space. In the current credit will not under the condition of strong, the quantity loose policy on the economy the stimulating effect of the limited, so the price means the probability of authorities try to will increase. And from the recent market speculation of point, if the central bank to take action of words, the chance to cut interest rates are the highest, if that's the case, then steel trading business capital pressure will also further decreases, and to the market operation will also be more freely, quite naturally strong willingness to price.
Taken together, though continued weak economic conditions make a lot of people are worried about, two quarters of economic growth will continue to low whether around? We believe, in the recent government issued a series of steady growth for the role of policy, the economic growth in the second half of a soft landing still can be expected. For the domestic steel price, with a price increase of business will, in June, endorsement to rebound still may!
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