CCTV: Best Year Steel Prices Continue to Fall! Who pushes? _ Price


Original name: CCTV: Best Year Steel Prices Continue to Fall! Who pushes?

Since November, the entire steel market has risen sharply, and this week's decline has increased dramatically. Data show that the price of the premium in key national markets has decreased from 300 to 750 yuan / ton in November. Similarly, the output of the Chinese steel industry during the first three quarters of this year grew by over 70 per cent on the previous year, which translated the situation of low profits and even losses over many years by achieving the best performance in the history.

The best year of the year, why steel prices fell further? What are the challenges of stabilizing steel prices? CCTV Finance Review called on the 24th of Novemberfrom

Li Xinchuang, Dean of the Metallurgical Industry Design and Research Institute, and Chinese Academy Research Scientist Guo LiyanA guest studio, in-depth analysis.

Steel prices continue to decline Who pushes their hands?

Li Xinchuang: Market expectations are not optimistic, which is the main reason for steel prices falling

Li Xinchuang, Dean of the Department of Design and Research at the Metallurgical Industry:First, the downturn in economic growth has increased, in particular investments in the steel industry, such as the decline in real estate investments and similar situations in the automotive industry. On the other hand, steel prices are at a high level and companies are trying to expand their production to achieve better profits. Some production and replacement projects replacing production capacity have been brought into production and the supply has been further expanded. The supply has been exceeded in the market. Thirdly, commercial frictions have direct or indirect effects on market expectations. These are the three most important factors that have led to a fall in prices at this stage.

Guo Liyan: The pressure moves downstream to center and to the uppermost head.

Guo Liyan, researcher at the China Institute for Macroeconomic Research:According to information from the steel industry e-commerce platform, the decline in event data in November was more pronounced. The inventory of large steel companies went down in the worse direction, while the social inventory fell faster, indicating that the pressure went through the downstream. Social inventors, ie traders, are reluctant to buy goods, and therefore the steel mills in the upstream chain have a currency exchange that has led to price cuts.

Li Xinchuang: Steel prices are declining, but also a subsidy application

Li Xinchuang, Dean of the Department of Design and Research at the Metallurgical Industry:First, steel prices have fallen, but I do not think it will fall significantly. The whole Chinese economy continues to grow steadily, so steel demand remains high. Secondly, if steel prices are too low in previous years, price levels this year are necessary, but Steel Industry is a capital-intensive, technology-intensive industry. Both production and research and development require a lot of investment so the healthy development of the sector requires fair profitability, which is also internal support.

Steel prices are stabilizing. What is the challenge?

Li Xinchuang: Production control, market stabilization

Li Xinchuang, Dean of the Department of Design and Research at the Metallurgical Industry:It is important to control production and not to blindly expand production.2016A year ago2018National capacity reduction1.5Billion tons, simultaneously dropped out1.4Production capacity of 100 million tonnes of ribbon products and technological developments in recent years in the various sectors of industrial labor productivity have created conditions for improving market price. At the same time, the impulse to increase production and increase production has also grown significantly. We have to deal with it seriously in regulation.

Guo Liyan: Making a good job, a top-grade addition, green is the cornerstone of price stability.

Guo Liyan, researcher at the China Institute for Macroeconomic Research:I actually disagree market in question the fact that the steel market is a market and a bear market bulls. Supply-side restructuring is actually a combination of the increase and reduction: Removal of low capital, this is a reduction of the dividend, but also brings the price increase in this round, which makes many companies in the steel industry better, the next step is to make the increase in time.

Before being investigated in Jiangsu and Zhejiang, some steel mills began to upgrade their products during the last price competition round. When I return to visit,11The price of this month fell, they did not suffer because the decline is not their major steel products. That is why I believe that this high-end and green development is an important cornerstone to stabilize future prices.

Li Xinchuang: High-quality development is a fundamental way for steel companies

Li Xinchuang, Dean of the Department of Design and Research at the Metallurgical Industry:The whole country is moving into high-quality development, and the steel industry has to adapt to this general trend. Firstly, we must do a good job of green and low-carbon development; secondly, we need to accelerate common structural reforms and improve the development of the sector. Intelligent manufacturing makes steel efficiency and efficiency more competitive and increases standards and brand building so that China's steel really improves its performance.

Guo Liyan: This price reduction cycle is an inevitable transition to the market in order to adapt supply and demand dynamics.

Guo Liyan, researcher at the China Institute for Macroeconomic Research:You do not have to worry about whether the price comes back a few years ago for the entire industry. The steel structure of the steel sector and the overall profit situation are nowadays unchanged. This is the result of supply-side phased restructuring. As a competitive industry, the future of the steel industry chain, from production to selling price, to profit and loss, must be a dynamic adjustment process.

A winning black industrial chain Who is eating a tiger in the mouth?

Now all black chain chains are concerned about the output of steel production. As I looked back in the past year, I noticed the rebar price as an example. The price did not seem to be too decent, except at the beginning of the year. It has just dropped recently. The price of hot wind is worse than the price of a reel, why? As some new industries are liberalized, the future capacity of hot coals is over 330 million tonnes. The price of raw materials is high with profit, the steel industry is ready to produce and is willing to pay more for the raw material price. Coke prices have risen steadily, coking coal prices have risen steadily, and scrap prices have recently fallen back, which is a very important phenomenon. It shows that the short process of the upstream chain is packed and the short-term steel plant started to take raw materials. This logic also applies to coke and iron ore for some time.

Demand for real estate investments, investment growth rate of 5.7%, real estate growth slowed further, 9.7%, real estate investment has some construction and installation investments, construction investments in September are -3.45%, formerly -3.24%, installation technology -7, 97% The first is -7.28%. Real estate investment in demand for steel can drag it to the withdrawal stage. On the other hand, demand in the middle is somewhat weak, but steel scanners are afraid of getting the goods. What should I do if I can not sell the goods in the next ten or twenty days? In the long run, the growth rate of long-term capital expenditure slowed down.

The investment is divided into three parts, real estate, manufacturing and infrastructure. This year there have been major changes in the real estate sector. The growth of new real estate construction and construction is good, and Jian's has declined. When everyone got to the ground, they hope to begin the sales process as soon as possible, so there is a need to have a rush to manage the costs and monitor the progress of construction. The real estate industry has seen a clear change in attitudes since June and July this year and will not start until May, but several construction projects will begin at the same time in July. What is the reason? The market can change and the country needs to be implemented, otherwise the real estate company will lose money in the future. The growth rate of real estate purchasing areas has changed and the growth rate of October was 10% negative. In the current situation, the construction of a real estate site is relatively normal, and some of them are currently in the pipeline. Demand looked just fine, but last week demand fell slightly.

Last year, environmental protection involves building restrictions, but this year's limitations are not. This year, the rigid demand in May and July is quite good, but winter is not expected to be an environmental disaster, and winter does not have an environmental situation, but construction time from north to south. . Real estate technology is an expected turning point. Although accumulated sources of funding are now relatively stable at the pace of growth, they have noticed that their future expectations have changed with alternative real estate companies. Such expectations change the speed of land acquisition and also change the pace of investment, which weakens the demand for steel, in particular reinforcement.

Investments in manufacturing are growing, and the industry naturally invests in producing a certain profit because it wants to expand its production capacity or hope for technical change or invest in environmental protection requirements. What should I do when my win worsens? Whether the growth rate of investments is stable or not is likely to be unstable and the growth in industrial companies' profits has begun to decline.

Infrastructure investment growth is stable and investment growth is very low. How enthusiastic is the investment infrastructure of local government in the context of a huge local debt? It is now a question mark. As local governments are more concerned about liability, if new debts arise, there is no liability. In the long term, the growth rate of infrastructure investments will not increase. China is in transition between new and old growth models. The transition period is precisely that the new growth model has not changed and the old growth model is receding. Nevertheless, we must rely on China's future economy.

The peak season of steel consumption is ready and the end is likely to start last weekend. The situation the retailers know about the steelworks sites is a sign that, for example, traders have asked for goods from steel mills and that steel plants usually have only two specifications or only one specification and are pulled out. It came out last week and I wanted everything. Although there was no apparent change in the apparent changes in prices and volumes, it was thought that the steel mill inventory was already underway.

Apparent consumption has increased throughout the year this year. The apparent consumption in September was 91.55 million and in September 92 million. According to high frequency data, the national building materials business began to decline significantly last week.

Traders are more cautious because they are coming off-season in December. Steel social inventories fell, brokers did not receive the goods, and stocks of major steel companies rose. The steel mill inventory calculates whether a passive decline or an active recession? If the active decline means that steel factories are starting to sell, such sales are not as solid as price but pressure. Lange Steel Trade's purchasing managers' index has all the benefits of the decline.

As early as December, as soon as the winter storage starts this year, the attitude of steel companies and steel mills is completely opposite. This spring, steel companies have very little money to produce goods, and some time ago they exchanged steel companies, all seriously injured, and if the steel mills do not provide a more priced prize this winter, the interest of steel companies in the winter storage is not high. In one of the next year's problem when steel sales and sales next year, next year in demand downstream, no one is afraid to speak now. Now that the macro is downward, in a difficult situation, the new politbyro meeting still does not say that the real estate market has begun. In the future, steel products, especially building materials, can be partially prevented. The total demand for steel products may be slightly weaker next year.

Data on the production and sale of excavators in October were relatively good and their decline was declining. The growth rate of cars was -10 percent, down 10 percent. This indicates that downstream consumption has some problems, including other brands.

Steel production in steel production, crude iron production in October was 67.74 million tonnes and annual growth was 12.87%, crude steel growth 9%, reinforcement level increased only 0.08% and some yarn production was restricted. The ratio of steel and crude production to the production of short-time steel plants is gradually being liberalized. Short-term steel manufacturing is subject to profit constraints. If this part is destroyed, the market is reduced, which requires continuous monitoring.

The limit for this year's production this spring from previous years is cracking down on limited production, but production has not fallen far behind the production limit, so production is passivated for environmental protection. Over the past two years, steel companies have also been good, coking companies are also good, investment in environmental protection is relatively large, a steel company that can be affected by environmental protection can increase 200-300 yuan per ton of steel. Some devices already have requirements. In another aspect, the profit of the steel industry has remained at a high level, while other technical measures may be taken to preserve the environment in order to increase production, that is, the phenomenon of a short-process scraping. Falling and rising.

In the steel industry procurement manager, everyone's interest is very high because they are big profits. When will production be reduced? Only when the profits of steel companies are packaged to some extent reduces production. Recently, owing to the decline in profits, environmental protection, blast furnaces, average daily crude steel production, such an effect can not change market expectations, especially at present the intermediate consumption has decreased. By the end of the year, middle demand has even turned into an intermediate product, which is not very useful in terms of supply and demand.

This is the main refinery production and yarn production, as the profit margin is relatively high. Steel export volumes are relatively low, as domestic steel prices are very good. Looking at the list of steel companies, the information published by the Chinese Iron and Steel Association shows that there are collected libraries. The next question is whether it is a way of reducing production and insured prices or making sales? From the current point of view, the output does not seem to fall too much, so the accumulation process continues. If the inventory is to some degree high, the price may fluctuate downwards as the steel begins to sell.

Import of iron ore remained at a high level, but imports declined in October. Trade gains can restrict broadcasts. If the price of a mine rises and the spread is removed, many people want to bring it. The market reflects commercial gains. From an import and production point of view, individuals believe that there is no security of supply. Where is the whole focus? It's a game between mines and steel mills. The price of raw materials rose in September when steel mills' steel companies supplemented and the number of days available on 9 November increased to 29 days, which is relatively high in recent years. Next, we have to pay attention to whether the refinery rhythm of the steel mill has stopped. If it stops, it will soon be visible in reducing broadcasts. Looking at the present situation, steel mills have risen. Under normal conditions, the supplementary power may be reduced. From the current point of view, it is still relatively high.

Domestic mining production is relatively weak, which has little effect on mining prices. Most of the imported mines that start from scrap iron when a short process production is compressed to some extent, long process compression begins when the price of iron ore is compressed.

The supply of coke does not vary, with ten production being relatively high. It should be noted that the production capacity of the coke oven can be limited and the capacity utilization rate decreases year by year. If the interest of steel enterprises in production starts to grow in the future, as next spring, it can be said that coke supply has been hit. Recently, steel mills complement coke stocks, and some companies have completed them. Some of them have not been fully supplemented. Now price discourse is a very delicate process, some coke crops have fallen by 100, and some steel factories have fallen by 50 percent, now they are in a relatively balanced state. As coke replenishment has gradually come to an end as the profit for steel production is packed, it may be at a certain point in the future and the spot price of coke may fall to mid-next month. Where is the core? Steel production is the core.

As steel production gains begin to fall, the steel mill's operations increase production and reduce costs, so profits can be guaranteed somewhat, but when steel prices fall, we see pressure upstream. When steel profits fall and fall to some extent, steel companies see a decline in production. The key focus of the core market in the future is the profitability of steel production.

From the current point of view steel demand is coming off-season, middle demand reflects intermediate production, the trader reflects immediate delivery when the trader goes into winter trading this year only when the price is right. Every year there is no winter storage, and winter is storage every year. The key is when the price is right. When we talked with northern merchants, sometimes 3500, he is fit, the steel mill is fit and does not fit, I'm playing here in the future.

Steel production is not as good as expected. Although the China Steel Association has released some information, the bill is very small. Steel factories complement the rhythm. At the beginning of the downswing, steel mills are more willing to increase their production. Demand for raw materials is fairly good, but when the winnings are reduced somewhat, we see a win upstream. Coke, short-term supply From the current point of view, coking companies rarely have stocks as steel mills have more demand for goods. The second coking project has never had a lot of mapping, which is determined by risk-taking. Most coking projects are unable to store. Now it is a tendency, which is a turning point that the steel mill reform can end.

We must pay attention to the steel production's victory, at present the steel production is falling and we see that short-term steel mills will benefit from upstream scrap and then see steel prices falling rapidly. Due to the current situation, long-term productive enterprises of high quality production facilities have obvious inventory pressures. Once the price reduction has been achieved, the efficiency of production is reduced. The drop in production income leads to an upsurge. There is probably a lot of opinions lately because off-season has come, the industrial chain's profits are squeezed. When we talk to steel companies recently, everyone is pessimistic. Like last year, this year, the macro-pessimism of the following year is being passed on to the industry. The fall in steel prices this year may be higher than last year. Scheduling Winter Warehouses for Traders is only visible when the spot price drops sharply. (Zhonghui Futures Li Wei)Go back to Soho and see more

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