Because the market is expected to get better, steel price ore price this week after first fall rose, appear signs of stabilising. However, because the stock remained high in steel operation, and steel demand coming into the off-season, is still not optimistic.
The steel industry in May PMI index changes show segments, the steel industry a serious shortage of new orders the steel industry PMI readings is quite low. And, as the steel continued weakness, forcing steel production step by step of overhaul efforts, but steel production plan adjustment of rhythm and strength it still shows insufficient, cause steel steel inventory increased significantly. In promoting steel to inventory turn at the same time, steel mill as down raw material inventory, reduce raw material inventory of capital to take up.
To Φ 16-25 mmHRB335 rebar, for example, shazhousteel maintain late may factory price unchanged and transit and "factory, 10 yuan/ton increase (including taxes price). Although the price of steel down still exists, but see market confidence was well and steel price showed signs of stabilising after, steel mills and not continue to cut spiraling steel factory, steel mills are through the bid strategies the intention of the offerings is obvious.
Although signs of stabilising endorsement appear, however we note that, since the end of may, domestic steel maintenance plans are endless. Steel production increased maintenance is one of the prerequisites rallied endorsement, but because the steel demand in the short term is difficult to reverse the trend of seasonal weakness, even if the steel mills positive control output, we think, are hard to rising trend now endorsement market.
By June 1,, the whole city is filled with steel plate (TTM) (eliminate negative) to 22.6 times higher than the average since early 2010 p/e ratio is 20.4 times, steel plate overall city net rate (MRQ) 1.07 times, less than 2010 since the beginning of the net rate of the mean 1.39 times, but with p/e and net rate was significantly lower than the average p/e ratio is 30.6 times the history and city net rate 1.92 times. Steel plate in a relatively high valuations p/e ratio wave.
The domestic macro data in May be disclosed, focus on long-term new loan data, we can judge if the domestic policy towards. However the overseas market fraught with risk, global economic growth prospects heavy eyebrows.
The market for policy loose expected in the short-term cash can even further observation. The steel industry in supply exceeds demand long existence, industry profitability will long-term low volatility. Our investment advice is still stability is given priority to, baosteel shares and deals with such as special steel industry bibcock has long-term investment value.
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