Limited the intensity of steel production
 
According to the latest data of the China Steel Industry Association, estimated in June the average daily production of crude steel 1.966 million tons compared with 1.975 million tons in May, Central fell 0.46 percent in the first half average reached 1.9507 million tons, and in 2011 was essentially flat. Although the average daily production data for two consecutive months, appears to reduce the current qoq slowed down over the previous month. According to the situation nearly three years, the "arch" trend is more obvious, and gradually expand in the loss of steel prices, have to open up the plight of the non-steel industry, we have reason to believe that the average daily output of 2.0193 million tons in April is the highest during the year a great possibility. Unlikely, though the reproduction of more than 2 million tons, but for now the third quarter decreased to the possibility of not less than 1.9 million tons, the trend for the future steel prices more need to focus on the improvement of downstream demand.
 
The stock rebounded to boost steel prices downstream
 
Crude steel production at a high parts of the country by the hot weather, making the already depressed demand for procurement appears more light, more difficult to merchant shipping. In the case of steel prices continue to decline, the market volume is not satisfactory, the stock rebounded. Social stock of the domestic steel by the end of June the end of unilateral since mid-February to reduce the trend, although the duration of the unilateral downstream is longer than in previous years, but downstream the intensity of only 18.8%.
 
From the data, we can easily find hot rolled plate and cold rolled in mid-June will inventory signs of a rebound, as a whole to maintain the downstream was mainly due to the reduction of rebar inventories. July 6, the social stock of steel reached 15.5484 million tons year on year, up 10.6 percent from 2011, while steel stocks reached 6.7251 million tons, up rose sharply by 23.3%. A time when the off-season demand, the downstream demand is difficult to have markedly improved, if steel production still can not be effectively controlled, the price of steel is hard to be optimistic.
 
Real estate regulation is not to relax
 
Macroeconomic data, released on the 9th June CPI rose by 2.2%, the PPI fell 2.1%. This confirms the interpretation of the market months the central bank cut interest rates intent, inflation no longer constitute a constraint for the monetary policy easing, steady growth is the main task of monetary policy. Wen Jiabao at the 7th the Changzhou research stressed the need to continue to resolutely curb speculative investment demand, to prevent the purchase policy of the disguised form of relaxation.
 
The rapid turnover in the property market recovery is mainly just need to purchase has been the central bank cut interest rates this basis, subject to the promotion of real estate prices, the developers also took the opportunity to campaign, to create the atmosphere of the house prices will rise sharply. Before market regulation continued to suppress the real estate inventory is still at a high level developers to take this opportunity to lower prices to return the funds practice is consistent with the purpose of state regulation, and eased the financial pressure of developers. Although the China Institute of Real Estate Index survey data show that new residential average price of 100 cities nationwide in June than in May rose by 0.05 percent, ending the chain for nine months a downward trend, but in the country to resolutely curb speculative investment demand policy guidance alone just to be difficult to sustain pull the rise in house prices may be limited by the magnitude of volume and price.
 
Consumption of a time when the off-season, the limited magnitude of the crude steel production, downstream real estate needs short-term and difficult to change, steel prices probably will continue to vulnerable run. Contract RB1210 and RB1301 contracts have been below the previous low, the downside is already open, this week, can not recover to 4000 yuan / ton, then the next strong support at 3900 yuan / ton first.



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