Steel price rise is demand for inventory adjustment results are not better – ste
12.12 on Development and Reform Commission proposed to "support the development of key industries to prepare and organize the implementation of the steel, automobile, shipbuilding, petrochemical, light industry, textiles, metals, equipment manufacturing, electronic information nine pillar industries of the revitalization plan, protection and developing pillar industries, key enterprises, major products and important capacity. "
9 major revitalization plan in shipbuilding, automobile, petrochemical and equipment manufacturing is important to downstream users of steel, if it can boost several industries, to boost the steel is of great significance. But the present situation, the detailed planning for the revitalization is not very clear need to wait for the introduction of planning and implementation. In addition, the recent steel price increases, primary and secondary steel production complex, we believe that this is not a true reflection of fundamentals, social steel demand has not improved.
Rising steel prices is the result of inventory adjustments
4 trillion economic stimulus package as the favorable impact of steel prices rose, but gains little. Iron ore price Index last month rose 14% over the same period, the steel price index rose only 2.8%. As a result of stock raw materials to produce a certain profit margins, many small and medium steel companies began to resume production, driving up prices of raw materials, including Hebei obvious.
From real estate, automobiles, home appliances, steel industry, demand has not fundamentally improved. December purchasing managers index is still low, but the chain has increased, indicating some restoration of confidence in the downstream industry. Since there is no fundamental improvement in demand, steel prices was mainly due to inventory adjustments, resulting in steel prices stabilized, the downstream users to start building inventories, dealers have to restore confidence, boost steel prices. On this basis, iron and steel enterprises tentative price increases, but still needs a stronger steel prices real recovery. December 24, Baosteel raised prices in February 2009, cold-rolled up 300 yuan / ton, up by more than 8%, up 100 hot-rolled coil? 200 yuan / ton. This is the August 2008 sustained fall in steel prices since the first increase Baosteel Steel products Price. In addition to Baosteel, the Shougang, Wuhan Iron and Steel, Sha Steel, Anshan Iron and Steel, Laiwu Steel, Jinan Steel and other steel products are the mainstream 100 yuan / ton to 300 yuan / ton increase.
We believe that this price adjustment is Baosteel tentative price adjustment, is also a decrease in pre-market repair transition, the international steel prices continue to drop, the fundamental improvement in the domestic steel market will have to wait.
Difficult to resume production demand continues to fall
By the state 400 million yuan economic stimulus package of good news, companies began to resume production. From the November data, crude steel output 35.19 million tons, down 12.4% over last year, a decrease of -17% higher than in October slowed. From the chain point of view, in November than in October despite output drop, but only 30 days in November, less than one day in October, average daily production of 1.173 million tons, compared with average daily output of 1.158 million tons in October increased 1.3% in the chain.
Because of the economic stimulus package, focused mainly on investment in fixed assets, demand for construction steel recovery, business recovery products are mainly small and medium enterprises in the production of construction steel, and large enterprises continue to cut production. In November produced significant recovery of SMEs, small and medium enterprises in Central China by 31.3%, while medium-sized enterprises up to -6.3%. From a regional point of view, producing more pronounced recovery in North China, small and medium concentration of the chain Hebei in November increased by 15.4%, significantly higher than the national average.
Domestic steel companies reduced losses spread rapidly increasing
11 2.94 million tons of steel exports for the month, the chain continued to decline, down 1.82 million tons more than in October, down 38.2% (6.67 million tons in September, October 4.76 million tons). We believe that the decline in exports was mainly due to changes in the international environment, due to lower demand. In the international steel market prices continued to fall sharply, domestic and foreign steel spreads narrowed sharply, the export situation is not optimistic about the future of steel, 2009's exports will increase domestic pressure on the domestic steel market.
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