Businesses sell more sufficient kinetic energy
First of all, just a half months, sell the rapid trend of hot-rolled prices, although the period there is no lack of interest rate cut good news appears, but also face the demand decline, coupled with the economic data is not satisfactory then unveiled, and the leading steel factory price substantially down more overwhelmed by weakness in the steel city of the "last straw." As of July 18, the leading city of Shanghai is down 160 yuan / ton; Tianjin market is down 220 yuan / ton; music from the market, the cumulative decline in the 180 yuan / ton.
Demand downturn bear the brunt of
Given the current time when the traditional low season, demand is low basic within the business is expected, but the introduction of various economic data, market expectations of demand to pick up and then kept for concern. Specifically, in the second quarter of this year, domestic GDP growth of 7.6 percent, marking the lowest level in three years since; the first half of the domestic urban fixed asset investment growth down from 20.9 percent at the end of the first quarter to 20.4 percent, close to the end of 2004 to the low; the national railway completed investment in fixed assets amounted to 177.751 billion yuan of capital construction investment of 148.706 billion yuan, down by nearly forty percent; the real estate business development investment from January to June, the construction area, continue to fall year-on-year growth rate of the three indicators of the completion of the area, new construction area of ??continuous year-on-year the third month of negative growth, and decreases showing the trend of monthly enlarge. The above data can be seen that the domestic economic growth is slowing, GDP is close to the target set by the beginning of the year (7.5%).
Domestic and international economic slowdown, the European credit crunch worsened problems have not been markedly improved, short-term downstream mechanical and electrical infrastructure products exports will remain stable mainly. By the construction of off-season, the operating rate of the hot-rolled upstream and downstream enterprises, such as reduced orders will become the main factors affecting demand.
Did not increase in the production overhaul
Original initiatives to overhaul scale to stabilize market prices and choose the rebound hopes on the steel production this month, has not yet been achieved. Baosteel special material hot rolling mill is scheduled repair the rest steel mills nearly ready to begin the overhaul Steel, Jinan Iron and Steel and Angang three. Originally planned maintenance TISCO overhaul plan postponed to early August, so the downturn in hot-rolled market has yet to find a breakthrough.
So, what is steel will fall into the "low demand and production is high" cycle? In fact, we can do to understand: Originally, some loss of business or in the enterprise of the gains and losses near the equilibrium point, it should be discontinued, but technical, cost and other reasons, can not stop, even if the losses are still in mass production; the other hand, the supply capacity is still increasing, the downturn trend in order to ensure the maximization of their own interests, the steel through the game, the end result is the only increase production capacity, before the ghost of a chance to increase market share, so a large number of small and medium-sized steel enterprises, private enterprises, with such psychological continues to increase production capacity, the benefits of steel prices into a low hover position. Late around the decline in the endless expansion of the market supply has not diminished the prominent contradictions will continue to be the promoter of falling prices.
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