The following elements may explain that why China steel prices may rebound after the National Day holidays:
1, October steel prices can be expected to climb
September, China’s iron and steel industry as a whole continues August decline, in unilateral downward trend, and decline again in late September to expand and refresh the lowest level in four years.
Chinese steel mesh view: September raw material costs and falling steel prices and the decline opt similar sudden contraction of profit making steel, steel production is expected in October around the corner, supply and demand, or eased, prices stabilized coming.
2, the central bank to relax the first suite that standard stimulus rebound in steel prices
From the central bank to relax (you can even say that stimulate) the property market moves, steel prices at historic lows, the situation is a large steel joint insured, the steel prices continue to fall little space, or tentative rebound from today will gradually kicked off. But you want to get fast, sharp rebound is still difficult, the futures market still see the spot market turnover.
Chinese steel mesh view: September PMI steel industry is not optimistic, production, procurement activities decreased orders fell, inventories rose, the cost of weakening support show that the steel market is weak state of both supply and demand, steel prices could fall further still. But Fu Bao believes relax from the central bank (which can even be said to stimulate) the property market moves, steel prices at historic lows, the situation is a large steel joint insured, the steel prices continue to fall little space, or tentative rebound from today will gradually kicked off.
3, steel PMI consecutive May shrink or improved steel demand Estate Deal
PMI shows the current situation of the overall weakness in the steel market seems to be developed, the obvious contradiction between supply and demand, the cost of supporting role weakened. It is worth noting that some of the bullish factors are the accumulation of the central bank to relax mortgage policies and the country is expected to cancel the purchase of the formation of a stabilizing effect on the real estate market, the gradual implementation of infrastructure construction steel market demand is expected to bring improvement.
Chinese steel mesh point: the trend for the future of the steel market, steel prices are expected to gradually climb the latter, and there is probably oversold bounce. But given the overall macro level is still bearish, especially in the steel industry will continue to ferment funding problems, weak pattern steel material change in the short term is difficult.
4, iron ore stumble endlessly or good steel industry
Located in the Yangtze River delta where a large private steel mills, as middle managers, Chun-Hung Chen lamented that thirty-four senior co shorter price, overseas iron ore producer said “stone on their own feet.”
Chinese steel mesh point: Today, a continuous fall in iron ore prices, favorable to China‘s steel industry. Chinese steel companies are coming out of the industry, “winter”, profits are expected to be better than last year overall.
5, mills turn profitable new model
Iron and steel enterprises, the overall market this year, still not much changed, overcapacity, lack of demand, prices rise fatigue challenging business conditions continue deteriorating business. A loss of 800 million yuan in the first half of Shandong Iron and Steel is no exception.
Chinese steel mesh point: Mountain Steel Group will focus on management and control, integration of various resources, layout development, focusing on the development of iron and steel, mining, real estate, finance and other four industrial sectors and various foster industry. This industry structure determines the mountain Steel Group must get out of control from a single pattern among the steel, the establishment of appropriate industrial platform, professional management of various industries.
6, after the National steel prices rebound points
1, the beginning of the quarter, slightly ease the financial pressure on the market, two, ushered in the bottom of the cost limited downside support, 3, is still the traditional peak season, four, room control relaxation effects appear, and several other aspects. Well actually predict whether the market will really follow the track ahead of it?
Chinese steel mesh point: the possibility of supply and demand after the National Day Steel City is unlikely to improve, and the inventory of passive social reconstruction will not bring better prices, and it will stimulate the bad, and the expected cost of funds has improved but still embarrassed or large use; stimulated significant events might stir briefly steel City, but still does not change the overall weak remind stage grasp market opportunities not covet your neighbor.
7, traders and mine suffered a major reshuffle
This year, iron ore prices way down, especially after the second quarter, a decrease to expand and continue the breakdown market expectations. To spot prices, for example, from $ 134 in early / ton high, down to the current 79 U.S. dollars / ton, down more than 40%.
Chinese steel mesh point: the first two years of the steel trade, the current iron ore trade industry also entered the shuffle stage. “This year has been a large number of iron ore traders drained.” Certain steel enterprises in Jiangsu Province relevant responsible person said, is not only the survival of small and medium hard ore traders, some traders in the industry also faced a top-ranking predicament. However, in this round of industry shuffling process, the profit structure of iron ore traders are restored to normal.
8, how Rio Tinto bear weight capacity of 360 million tons
Rio Tinto’s Pilbara in Western Australia are the traditional open-pit mines, the use of drilling and blasting methods can be obtained. Therefore, thanks to a huge advantage on the cost of production, and in ore prices gradually into the downstream channel of background, Rio Tinto decided to adverse economic expansion.
Chinese steel mesh point: Recently, this reporter went to Australia in the field interviews found that Rio Tinto is currently invested in the expansion of already covered its mines, railways, ports and other aspects of iron ore production. This famous miner‘s goal is 290 million tons of production capacity in the existing basis, to reach 360 million tons, or 100 tons per day production target.
9, the first drop in 14 years, steel consumption pattern of weak steel die hard
China Steel Industry Association vice president Wang Qi pointed out that the situation caused by apparent steel consumption in the first negative growth in 14 years, the reasons include the slowdown in economic growth, economic restructuring underway. Demand for steel consuming industries are also reduced.
Chinese steel mesh view: Given the overall macro level is still bearish, especially in the steel industry will continue to ferment funding problems, the overall atmosphere is still weak steel market, steel prices weak pattern in a short time will not be significantly changed.