July hot, the steel industry is still experiencing winter. As the panic mentality is dominant, the steel of spot prices showed sharp fall pattern, the the rebar period of price weakness filling. Steel production seems to be the only way out of steel prices to reverse.
As of July 20, the national market two rebar, the average price of hot rolled coil respectively to 3837 yuan / ton and 3921 yuan / ton, down 427 yuan / ton and 321 yuan / ton, compared with the end of last year, a record of the past two years low. Even so, the steel prices has not yet stopped the losses amid pessimism strong emotions, some steel traders and even regardless of the cost to sell. Recent CCTV Financial Channel continuous steel industry reports, overcapacity, financing difficulties, closed bankruptcy and a series of issues are emerging, the steel industry has become the moment to be extremely "bad-mouthing" of the industry.
When the steel market of a turnaround? Author's answer is "depends on the steel production will be the only choice for iron and steel industry is able to usher in transit.
Serious excess capacity, the steel production remain high
Domestic steel production capacity has exceeded 900 million tons, while domestic steel demand is estimated down to about 700 million tons of serious excess capacity. In April, the average daily domestic crude steel production reached 2.019 million tons, a record high. Early May to July, average daily crude steel output still remained high at 196-197 million tons. Minority tune billet rolled products manufacturers in mid-July cut signs, but the steel mill's blast furnace basic start, which means that short-term crude steel production does not vary materially reduced. Although the steel organizing production losses, but still marginal productivity contribution, stop production losses caused by
Price "Forced", steel production is imperative.
From the first half of various leading indicators data, China's economic downward pressure is still larger. Although the central bank has taken a drop prospective interest rate cuts and other measures, but the country during the industrial restructuring and real estate regulation, is not realistic to hope the large-scale investment-led demand. As of mid-July, the domestic steel, hot rolled coil, five varieties of steel of the social stock of 16.02 million tons, an increase of 10.2%. Order not more than, steel inventories at high levels. General downturn in the downstream industry, steel consumption decreased, the CBRC to the degree of risk of the steel industry climbed to second, the financing difficulties of the steel trade enterprise, "blood" seriously greatly reduces the flow of steel. High inventory, tight funds and other adverse factors steel prices continuous Powei downstream.
2011 fourth quarter slump in steel prices, steel mills under pressure to cut production, in exchange for 2012 first quarter of the 300-500 yuan / ton steel prices rebound. The second quarter as steel production quick release, steel prices return to a downward spiral, especially in July, the case of other commodities, rebound, Steel City slump. Steel mills comprehensive losses in the steel trading business, "miserable" situation worthy of industry food for thought.
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