In July 2012, the rebar futures prices plunged across the board. Fell to around 3750 yuan from the beginning of the minimum around 4050 yuan, the minimum has dropped to 3652 yuan. We believe that below the previous low probability of small, short-term trend of low volatility.
Cost of iron ore in steel production, a larger proportion of iron ore enterprise bargaining power is the strongest. Iron ore prices in July fell by about 4% relative to steel stock futures fell a lesser extent. July average daily crude steel output in China is still maintained at a high of more than 1.9 million tons, maintaining the iron ore demand, limiting the decline in iron ore. The domestic steel industry is still in a recession, a large number of steel companies were forced shutdowns. Expected August, crude steel production will decline, iron ore, the probability of a certain degree of Budie.
Steel production and profits are expected to rebound in steel prices downside is limited. From the macro-industry perspective, according to the National Bureau of Statistics released data on the 27th January-June above-scale industrial profits continued to decline, the steel industry profits declined by more than 50%. Overall, the continued downturn in China's manufacturing industry, market demand is difficult to improve the dismal short-term. Raw materials Budie will reduce the cost of steel, may cause steel prices under pressure.
Investment-led policy of inaction, steel uplink fatigue. Investment in fixed assets in the first half to complete the year on year growth, but much lower than the same period last year, fixed-asset investment growth is still down gradually. June compared with the first three months of fixed investment growth must increase, indicating "steady growth" as the keynote of this year, consumer short-term is difficult to take a leading role, steady growth is still to rely on the stimulation of investment. This has in the recent work of the central to be reflected, approval of major infrastructure projects significantly accelerated, increasing government investment.
Business inventories near historic highs. June steel stocks remain high stabilized, but business inventories rebounded, indicating that the social stock is gradually transferred to the business inventories. The end of July, focusing on steel stocks has been close to the historical record in mid-February this year, the highest inventory of 12.46 million tons, indicating that the steel business is tough on the situation. Downstream receiving goods wishes, the production of steel prices remain high, the increase in business inventories. Future to the inventory will take a long period of time, short-term high inventory problem difficult to solve, high inventory limits the height of the rebound in steel prices.
From a cost point of view, in the case of steel production is expected to decline, weak demand, iron ore, may have a certain degree of Budie. But the decline in steel production will price the formation of some support. In national economic policy stimulus expected steel prices likely to rebound, but space is limited. On the futures market, to maintain the shock operational thinking, should not be chasing empty.
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