Analysts pointed out that the current steel prices and the market price spreads slightly higher than the historical average, serious upside, the downside still exists.
No market expectations, first known as the industry leader in the beginning of this month's Baosteel to cut steel prices in July, including Wuhan Iron and Steel, Anshan Iron and Steel, Shougang, including leading domestic steel prices have lowered steel prices and lower the pace of basic consistent.
Analysts said the price cut policy of the leading steel enterprises in line with market expectations, mainly due to the real domestic demand remains sluggish, while production is still at historically high levels, supply and demand highlights.
In fact, such a severe contradiction between supply and demand is also reflected in the social stock of steel - has been for 17 weeks decreased, but the speed is still slow to the inventory. The social stock of steel compared to last year, remains high.
Steel prices downlink space still
Steel enterprise performance decline in the probability of large
From the July price policy point of view, the major steel prices down basically the same pace. Them. The Baosteel steel prices generally fell 200-300 yuan / ton; Wuhan Iron and Steel fell 150-200 yuan / ton; Angang generally fell 130-200 yuan / ton; the Shougang drop in 80-200 yuan / ton. room.
In addition, it is learned in order to encourage ordering, the above-mentioned steel, while the sharp decline in steel product prices are also given different degrees of preferential policies. Angang and Shougang some customers in advance in a certain period of time ordering consecutive order a different degree of ordering concessions or subsidies, the same part of the order of the two major steel customers can enjoy the preferential policies on the acceptance discount.
These measures reflect the order pressure and inventory pressures currently faced by the domestic steel mills. Pointed out that the three major steel factory price down there is a certain extent, is subject to the needs of manufacturing off-season and a decline; the other hand, the release of the spread of some of the early stock fell caused the steel industry of the Changjiang Securities analyst Liu Yuanrui The upside risk is conducive to stabilize the spot market and the mood of the terminal manufacturers.
The Shenyin analysis report claimed that the main macroeconomic indicators in May to continue down the industrial added value and PPI total growth rate of close to 2008 lows, new start growth of the downstream real estate, auto sales growth and other indicators also significantly decline. Meanwhile, in May the average daily domestic crude steel production fell slightly but still high, the production release of the steel prices limited the intensity of support, weak prices is unlikely to improve in the short term.
Moreover, according to estimates SW ,2010-2011 Baosteel hot, cold rolled prices with the market average spreads were 1172,879 yuan / ton; Wuhan Iron and Steel 1453,707 yuan / ton; Angang 27,35 $ / t. Baosteel, Wuhan Iron and Steel, Anshan Iron and Steel factory price compared with the spread of the market price, the vast majority of species are still slightly higher than the historical average of the previous two years, ex-factory price upside serious, but the monthly convergence of the difference also reflects the lower reaches of the true demand is still strong support, the downside still exists, to stabilize prices still need the support of the recovery in demand.
The decline in steel prices has cast another shadow over steel prices this low performance. Angang Steel, for example, listed steel prices just to the 2011 Annual Report and a quarterly in 2012 were 2.146 billion yuan Ho 1.888 billion yuan, huge losses after the Valin Iron & Steel to become the new loss of listed steel prices. Corporation (Angang Steel Company Limited) in mid-April and the Anshan Iron and Steel Group and Panzhihua Steel Vanadium Titanium raw material related party transactions Purchase Agreement, the program still need to get by the general meeting of shareholders in accordance with our hypothesis that the ore pricing system reform after the company quarter substantially cut its losses, but even so, after the ex-factory price has been lowered in July, the decline in the profitability of a single month or more determined. "In this regard, Liu Yuanrui expected in the analysis report.
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