2014 stainless steel destined to weak MSC, in the coming 2015 years, China’s stainless steel industry will continue in the winter period, the upstream supply will also rise, the downstream demand is due to the economic downward pressure increases may show slowing growth; In light of China’s economy is the new normal, the stainless steel market, is expected to usher in a new change. In view of the existing data, the author analysis, overall level of 2015 stainless steel market will continue to weak this year, the author draw attention to the following several aspects of the change.
Economic growth from high speed to the high speed change, from quantity to quality
China’s economic development has entered a new stage, xi general secretary put forward the new normal development of China’s economy, one is the growth in the high speed to high speed, the second is the transformation of economic development structure optimization, from quantity to quality promotion, the third is to continue to be given priority to with investment mainly to the market change, our country economy is rapidly into a new stage. For a period of time in the future, our country economy “new normal” feature will be more obvious. Central bank report in 2015 China’s GDP growth is expected to drop to about 7.1%, and the market is popular belief. Overall economy continues to sputter, for heavily reliant on the economic development of stainless steel, 2015 stainless steel demand growth continues to fall in our country is already a big probability event, have gain the default in the market. The central economic work conference in December of next year’s development has made the significant deployment, there are a lot of bright spots and new way of thinking, bring new expectations, may to the stainless steel industry is worth looking forward to. However, the government investment in the transformation of economic structure adjustment light, heavy consumption, light manufacturing, heavy service industry layout, some disadvantages for traditional production data, such as the stainless steel industry.
2015 national macro policy expected loose, get a boost market confidence
In 2014 our country residents’ consumption level in a continuous phase, the weaker CPI growth in the second half of the year in the age of “1” for a long time, especially the CPI rose to 1.4% in November, a new low in five years, the data show that China’s economy is standing in the doorway of the deflation. Downward pressure is still large, combined with our country economy structure adjustment pain appeared, enterprise production and management difficulties increase, part of the economic risks. At the end of the end of the central economic work conference, made it clear that 2015 will continue to implement a proactive fiscal policy and prudent monetary policy, to promote the “troika” more balanced growth. In the current environment, drop, such as rate cut loose policy more likely. Is expected in 2015 macro policies, especially monetary policy, real estate policy, from the previous state of tight, edging towards easing and normalization. Above will be of economic entities, including stainless steel industry, with greater confidence.
Iron base investment sing leading role, will stimulate the periodic demand release
Approval at the end of 2014, the national development and reform commission on a batch of major iron base investment projects, including railway construction investment has reached 1.2 trillion, water conservancy and hydropower investment will exceed 1.8 trillion, focus on implementation of the “area”, the coordination of the northeast industrial transformation such as regional development strategy and other major projects involving infrastructure investment, plus the urbanization construction and so on, the author thinks that, in 2015, major engineering project construction in our country, although not fully take over real estate fall vacant, but still needs periodic release process, so as to guide the rapid rebound in steel prices in the stage.
Stainless steel export trade friction intensified, late is bad for export
In 2014, the Chinese exports is expected to more than 3 million tons of stainless steel, especially in the second half of the export record highs, in global trade attracted enough heavyweight in the threat. Aiming at all kinds of stainless steel anti-dumping investigations obviously increased, more and more serious barriers to trade, the export trade of pressure surge. In this context, the experience and means of dealing with trade friction also serious lack, especially domestic reach relevant steel traders are still in the passive acceptance, even if has a active response in their own way is, the lack of a unified response mechanisms, more a lack of support from the government level. So, if not effectively deal with the more and more trade barriers, China’s stainless steel export business may be affected by the larger, even if exports, but also on the competitive advantage will be further reduced. Of course, should also be aware of, Africa, India and other emerging market countries are currently in the phase of rapid economic growth, demand still is bigger, but the local capacity is still unable to meet their needs, needs a large number of imports, so for stainless steel exports next year should not be too pessimistic.
Global iron ore market supply and demand contradictory intensifies, ore prices fall
In 2014, as the slump in the global iron ore prices, the international mining giant due to guarantee profits, and the purpose of the joint reorganization to borrow the international mining city order, take the initiative to reduce the price and expansion, intensified the international iron ore market supply and demand contradiction. And with low cost of overseas three mining giant ore is given priority to, are in full on high-cost mines, grab market share. Global mining city late excess production capacity, supply pressure will be more and more big, price competition will be more intense. High cost of mine one day die, mining giant will not give up the initiative on extrusion rob market movements, and the space is very big, even if the mining giant successfully crushed to death high-cost mines, but excess iron ore market supply and demand situation has been formed. At the same time, the demand fall, the consumption of iron ore will also showed a trend of high rushed back. In addition, the stainless steel industry the tight money in a day don’t understand, the mineral raw materials such as on a day not lax. Although at the end of the big four early expansion plans were postponed in mines, but overall expansion plan unchanged, so for future supply pressure is relatively early expectations appear slightly better, help for iron ore price stabilization, but insufficient to stimulate rebound momentum is obvious. Therefore, the author thinks that, under the situation for the strong to the weak, in 2015 iron ore market still has room to continue to weaken, low cost will continue to become the norm.
Comprehensive above factors, in the coming 2015 years, the domestic and foreign macro economy continues to face a greater downward pressure, stainless steel industry face the macro environment in difficult has improved significantly and at the same time, is likely to continue to deteriorate. Next year China’s stainless steel continues to decline in aggregate demand will also steady inevitable, exports still is the key to improve the domestic pressure. In this view, the 2015 stainless steel price level will be weaker than this year, the stainless steel market as a whole continues to weaken; But in the reform of public investment, dividend release iron under the stimulus of years there phases may rebound. The upcoming 2015, our country economy in the new normal, stainless steel industry will also get more opportunities and challenges.