According to statistics, due to the domestic orders expected positive after the Spring Festival, the prospect of China’s steel market next month is expected to be improved significantly. March platts CSSI index was 72.2 points (up to 100 points, more than 50 indicates rising expectations; less than 50 indicates falling expectations). Index in March compared to a record low of 8.8 in February jumped 63.4 points, reached its highest level since April last year.
, industry sources said: “the steel industry after the Spring Festival, market sentiment rebound was very normal, but as a result of a few months before the orders continue to decrease, and after China’s steel market is not very active, so the range of the rebound this year even more significant. Despite a lot of new orders for the expected increase, but the market for the exports of pessimism still linger, and high iron and steel stocks may also inhibit the steel price back to the original level.”
Visible, years later, I’m afraid that the steel industry rebound is only a flash in the pan, but for the iron and steel industry have been rare, as the essence of the end demand started in March, the stock market will gradually get digestion, and the ore prices fell below $60, lead to cost of steel is still hitting a space, so the steel mills of profitability is expected to rebound in March.
To this, zhang Lin, an analyst in an interview with reporters said that after entering march, due to the climate, the declining trend of steel prices will be compared with before maintain a state of stabilising, “premature to at that time said that steel prices rebound, can remain in a stable range at best, because in the since 2015, the domestic iron and steel stocks have been on the rise, already for 8 weeks to keep growth, under the pressure of high inventory, even into the traditional peak season, steel prices also seek stability, the support of hard for steel mills, can only digest and delivery”.
The steel price is hard to find
Since January 1, the environmental law implementation, for the iron and steel industry, the environmental costs rise further, iron and steel enterprise survival environment is more difficult, and to survive in this environment, the domestic steel production capacity is also slowing the pace, according to the international steel association, according to China’s crude steel production in January of 65.5 million tons, down 4.7% year-on-year. Although the international steel association statistics and the national bureau of statistics data, and considering the steel demand and the lunar New Year holiday, steel production dropped in. But let the iron and steel industry is embarrassed, cisa statistical key iron and steel enterprises in February ten-day degrees than in crude steel nissan, but steel mills finished goods inventory increased dramatically.
The analysts explanation says, “before the Spring Festival, some steel mills are in a state of production and maintenance, production declined, but due to the Spring Festival, the steel mills shipments to reduce, lead to increase inventory”.
Cisa statistics show that focus on large and medium-sized enterprises occurrence peak nissan 1.631 million tons, in February from January (1.778 million tons) to reduce the average nissan 1.778 million tons; Key large and medium-sized enterprise inventory of 16.467 million tons of steel, increase from January of 1.7 million tons, 11.5% increase. Clinch a deal in March as demand recovery, improving, steel mills inventory is expected to fall.
But the personage inside course of study also told reporters that although to march, the domestic steel mills are in a peak season demand growth, but under the high pressure capacity and inventory pressure, domestic steel mills in order to digest inventory, have been quick to the extent of the sale, “cheap offensive even Chinese steel mills have been Japan steel traders say is at no cost to sell, can be seen from the domestic steel mills in order to expand market is already in the cutting, the domestic steel market competition is intense, steel mills are desperately trying to find a market in foreign countries, and have orders took”.
Which is caused by the sale of steel price is still hard to find support, data show that last month the national steel composite price index is 103.6, a 1.5% drop from the end of January.
“Steel prices is the support of domestic and foreign steel digestion rate, iron ore prices are still has a tendency to test, now already fell below $60, steel cost is lower, so the steel mills profit in the future have a good expectations, but because of the domestic steel exports too eager, the future is vulnerable to overseas steel companies to boycott” zhang Lin said.
Expanding domestic demand is still the king
After the last year for the first time a net exporter of steel in China, the speed of China’s steel exports slowed in this year, no meaning. Figures show that China’s steel exports in January 2015, hit another record. Customs statistics show that China’s steel exports in January of 10.29 million tons, from the previous month an increase of 120000 tons, rose 1.2%, up 52.1% from a year earlier. Compared with the export, China imported 1.15 million tons of steel in January, fell 60000 tons, the month fell 5.1%, down 15.1% year on year
Since 2014, due to a surge in China’s steel exports, leading to other countries to our country related steel products increased trade sanctions. In February this year after Malaysia for our hot rolled coil, plaid oil and acid coating coil ruled an anti-dumping duties of 2.49% to 12.19%, 2.49%, Thailand will also be the unvarnished aluminium zinc steel plate in China anti-dumping tax rate from 2.86% to 26.22% in February 2013 to 29.5%. Iron and steel industry in China in 2015 by other countries trade protectionism limit situation is not optimistic, in March, steel exports are expected to fall.