Burdened by the weak global economy, especially industrial and economic growth in China for four consecutive months in a negative growth of China's steel industry has been a downturn is difficult since the first half of the steel price trend on the whole easy to fall hard up. By multiple factors such as the European debt crisis and the domestic market demand, sales of steel prices have fallen sharply steel prices caused by loss reasons.
Steel market demand is not because of the off-season short, but this year, the downstream demand has not been effectively pulling the steel city has been in the downturn trend of unexamined, but domestic steel prices high innovation capacity, exacerbated by the Steel City supply and demand crisis. Aware of this when the steel production capacity has staged Sheng Sijie: capacity to control the gradual failure of the market Forced production slowdown, steel prices have deep down.
Some analysts pointed out that since this week is both picked up the raw materials, finished goods inventory of steel, steel procurement is more cautious, the terminal of the finished steel demand side is also a further shrinkage; announced on July 9, June PPI and CPI index both less than expected, the disadvantaged operation of the industrial economy, or will continue to dominate the domestic steel prices is easy to fall hard to rise. Vulnerable die hard domestic spot steel market, the composite price index continued to fall, and the decline has been slightly expanded. Although three of the world's central banks invariably released loose good, but "direct response" of the steel market is still relatively flat and were unable to boost market confidence. The market believes that the three central banks move from reflection of the grim situation of global economic growth. Difficult at a high level of steel production, the growth in demand for the shortage of Steel City businesses mostly continue to cut prices in order to shipment.
From the phase rotation trend of steel prices prices, steel prices in the oversold after, should usher in a timely rebound; and the current cost side, the steel mills are basically with this condition; the only thing lacking is the terminal needs recovery in the short term but it is difficult to achieve. Fortunately, the release of the demand for steel base already has, just a matter of time.
Various economic data have been released in June, the data show that China's economic growth still in the down stage, although the decline has slowed, but the short term is difficult to be effectively curbed, plus CPI index dropped sharply to 2.2%, to the future state macro monetary policy control to leave more room for; can be expected that in the late period of time, the central bank will drop prospective further release of liquidity, in order to ease the financing difficulties of economic development.
Of centralized audit a large number of infrastructure projects is being prepared in early June, the end of May; expected to be coming on line to start building in late August, when the demand for steel will focus on the possibility of release. Coupled with the steel market will also enter the seasonal "golden nine silver and 10" high season prices, coupled with the protection of the housing project data show that in the first half of the nervous moderate, in order to complete the annual 18 million sets of tasks in the second half blitz construction are also more likely, while the national the second half of the real estate market pick up signs of obvious, the most difficult stage of the developers or the past, the late real estate development will also began to pick up a greater contribution to growth in demand for construction steel.
In such circumstances, steel oversold bounce is bound to achieve the near term, does not have this basis, the summer temperatures will continue to curb the release of the demand for steel; can although slightly down and upstream steel production, but large and medium steel prices have said no large-scale production plans; means that the market outlook, production will still remain high; At the same time as the raw material market has stabilized; steel continuous downward ex-factory price, the late steel mills continue to cut prices none other space narrowing. So, we believe that the time of the summer demand for off-season, steel shock correction based overall performance will be ups and downs dilemma, mutual stalemate; stage a rebound or to be delayed until mid to late August.
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