Economic downturn, the central government to release loose signal
Into the second quarter, China's economic growth to slow down signs, 4-May macroeconomic data have shown that the "Troika" to promote economic growth is sluggish. Leading indicators of power generation and the manufacturing PMI showed that the generating capacity since the second quarter began to decline in April, generating capacity, net of seasonal factors, almost no growth; HSBC China PMI values ??in the first half of the year continued to decline. Other macroeconomic indicators, such as industrial added value, import and export, investment in fixed assets data year-on-year increase in the chain have declined.
 
In this context, the national high-level leaders frequently to the district investigation, and issued a series of policy easing to stimulate, as Premier Wen Jiabao held a State Council executive meeting, stressed that the dependable growth on a more important position; the National Development and Reform Commission to speed up project approval, in March April and May, respectively, for approval of items 258,233 and 167; China's central bank to reduce deposit precision on May 18 and June 7 and lowered deposit and lending rates. July 5, less than a month, the central bank again lowered the benchmark deposit and lending rates.
Steel mills stop production overhaul was extended to the real effect remains to be seen
 
From the historical data, China's crude steel production of key large and medium-sized enterprises has appeared three times significantly cut behavior, as shown in Figure 2, respectively, appear in the July-December 2008, June-September 2010, September-November 2011 , on the premise the market price slump (see Figure 1). Significantly cut production of crude steel production, the market is slowly picking up, This shows the large-scale production of steel is often an important signal of the market bottomed out.
 
Since mid-July to late, the steel prices again decreased significantly. Affected by this, the steel mills with varying degrees of cut behavior. According to statistics, as of August 3, blast furnace 395 of the 163 iron and steel enterprises have emerged and maintenance of the steel mills for 45, the blast furnace 58, the average daily hot metal production of 104,800 tons, taking into account other steel mills limited production situation affect the average daily hot metal production is about 145,900 tons, the real impact of temporarily late whether the formation of the climate remains to be seen.



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