Multiple factors, restricting steel is difficult to cut
 
For domestic steel mills, private steel mills more than the amount of production, according to market demand in order to stabilize the steel prices, but nonetheless "elbow on the thigh", and the effect is not obvious; large steel mills, especially state-owned steel enterprises because of various reasons, will, no obvious cut and Steel Association data show that early in July, crude steel production capacity is still as high as 1.96 million tons.
 
I understand from the state-owned steel enterprises to insiders; afraid to take the initiative to cut production, resulting in damage to both market share and existing customers may be competitors, "undercut" the risk of making them not the first to eat, cut crab. In addition, the "political" factors restricting the state-owned steel enterprises can not easily stopped the main cause of the blast furnace; local government will never allow the state-owned steel enterprises in the area because of cuts caused by the reduction in revenue, can not accommodate workers resulting in local social instability factors occurred. In addition, the steel mills to maintain a more active production activities can be more convenient to obtain loans from banks and production activities to reduce steel short-term difficult to rebound, and then blocked cause bank loans, a large state-owned steel enterprises unbearable.
 
In this case, the steel mills would prefer lower prices to let, or even prefer losses are also reluctant to cut a great past, According to my investigation, the stage of the domestic steel per tonne of steel loss in the hundred or more; steel internal inventory serious backlog clear inventory is still the main direction;, analysts believe the price cuts clear inventory in the steel mills the next period of time is still the mainstream.
 
Small and medium-sized steel mills increased risk of post-Steel City to enter the steel mills, raw materials, the boot stage
 
Steel prices continued to slump to suppress under the large and medium-sized state-owned steel enterprises because of the strong financial resources, a wide range of financing capacity and policy support, while difficult, but bankruptcy is relatively nowhere; however, as the storm rocking the small and medium-sized private steel The plant does not have this advantage; in case losses continue to increase bankruptcy risk. Late small and medium-sized private steel mills are expected to go cut the main, to lose the price advantage, market share is not invaded and occupied, until the bankruptcy out of line; poor profitability have made some private steel enterprises to difficult Kangzhu pressure; private steel production set in the bank that received loan limits, private steel mills would like to continue last-ditch difficult.
 
Steel mills cut prices and spot market prices the way Yindie the case last week, Tangshan billet prices plummeted more than 200 yuan, the major market decline in value in 100 billet; imported ore price fell about $ 6; steel costs decline began to enlarge . Which may generate late steel prices steel price adjustment, and costs decline, together triggered the collapse-style bottom; I still retain the view of the late steel prices fell below 3500 yuan, and may even go lower at the downstream.
 
The actual economic downturn is much larger than the market data released by the industrial economy has contracted a very serious, and the second half of our economy can achieve "steady growth" in the stimulus plan in a series of now there is no clue; so, the basic demand for steel surface there is no positive pull of sexual communication; transportation projects, and protect the housing market is also worth the wait, the question of financing is still the biggest obstacle. I suggested that the spot market operations continue to maintain low inventories means mainly the flexibility to adjust the inventory structure is not suitable for bargain-hunting gambling market



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