April steel prices the fundamentals vulnerable Temple Board

2012 Steel City in April there had been rising, but also short-lived, weak fundamentals, means that the steel prices ushered in the dawn, but also a period of waiting for a long time.

First: the upstream and downstream industries compressed dosage

Although the state has continued to decline in order to stop economic growth, increase investment stimulus is also a further loosening of macroeconomic policy, but the major projects from the project to bid, to the preparation, funds appropriated in place a series of operations will take time. And this part of the project even if the overall execution according to plan in place, the actual steel demand can not make up for the real estate development, machinery manufacturing and other industries due to compression of the economically disadvantaged or industry regulation to bring steel demand, market still hesitation among them.

Second: the weight of the financial pressure steel trade

Since the spring, the steel trading business due to financial problems strand breaks on foot and suicide is still fresh in our memory, because their industry is not standardized, and banking supervision and other aspects of vulnerability caused by the credit crisis of the steel trading business. The highest institutions of the financial markets, including the Banking Bureau of the CBRC, and some cities have issued a warning steel trade credit risk.

Now, despite the financial markets face relatively loose, and even the banks a substantial decline in demand for loans. But the steel trading business loan financing is still very difficult, a loan shark to maintain their operations and gone. Sexual shortage of funds flow within the industry also makes the obvious weakening of the steel trading business, the possibility of the stockpile gambling market outlook, brokering difficult for the market downturn to prop up the market, resulting in steel prices has always been calm like water.

: The international economic downturn, deterioration of the export environment

Shadow due to the debt crisis in Europe has made a series of countries into debt black hole, the downturn in the steel industry is not only the Chinese one, the global steel industry, the industry could not escape the cold wave crisis. As reported by the recent steel prices net rumors River Steel interested in the acquisition of Brazil's steel mills, a downturn in the global steel market, ArcelorMittal, ThyssenKrupp, Germany and other global steel giants have recently announced that it will transfer the steel assets .

In mid-June, the European Parliament voted in favor of the 13th 2014 the European Union trade preferences to developing countries arrangements, the latest resolution will enjoy GSP number of countries to reduce from 176 to 75, corresponding to enjoy preferential The total value of imports by 60 billion euros in 2009 to 37.7 billion euros.

European debt crisis-ridden, daily club, its financial position, the tight fiscal European countries began to tighten the welfare of his country's trade, and reduce the GSP range can undoubtedly increase the country's tax revenue, can further protect domestic industries and enhance their employability.

Although the domestic steel exports in May reached 5.23 million tons, the second time this year over five million tons. However, we export data since 2007 to remove the outside after the 2008 financial crisis in 2009, in May of each year steel exports are at a higher level. The contrary, the recent debt crisis in Europe continue to deepen and spread of, and the manufacturing industry of China, America and Europe regions reproduce the weakness is even more worrying. The current high yield, if the external demand can not be good to share part of the production capacity, even the previous consumption and then back to the young domestic, then the entire domestic market pressure must be spiking upward.

Some of the many steel enterprises to carry out non-steel industry, and some choose to close the plant, but the domestic overcapacity is still a big problem.

The assumption that the medium term, China's annual GDP growth rate of 6% for each additional 1% growth, you need to produce steel of 0.6%. China's steel production capacity of 850 million tons, using only 680 million tons, use the six years to make the production capacity to take full advantage of the state. So the steel industry prospects for the next 10 years is not sensational, nine loop since the second half of 2011 steel is the best proof. As Iron Man, our thinking may no longer be how to expand production capacity, local government capacity in exchange for GDP, really need to think about how the surplus for the rational utilization.


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