Steel will face greater downward pressure
Since the beginning of June snail market swings of anxiety, so that the already very sluggish steel market also increased somewhat restlessness, reproduce low prices in the market two days of snail, Xianluo quote on the spot market also reproduce vulnerable, high Shanghai market line quote still irresolute about 3150 yuan row, but there is a business propylene price movements from time to time, the Beijing market was weak, high-line quotes are only about 3140 yuan, three large spiral quoted at 3130 yuan, Shanghai is the trend. These days there is a clear market price, Nanjing, Jinan, Tianjin, Shenyang, ranging from a decline in the 10 - 30 dollars. Industry analysts believe that this two-day market down, mainly affected by the sharp decline in iron ore prices, the data show that the decrease in iron ore prices reached $ 91.8 per ton in May 31. During the Dragon Boat Festival holiday iron ore, steel billets and other raw material prices are still falling one after another, diversified miner of iron ore production is improving, pure iron ore supply manufacturers also continue to increase, eventually leading to oversupply and a further slump in iron ore prices situation. And billet prices have also decreased significantly among. Upstream products fell sharply, may be beneficial to reduce the cost of production of steel, but more price cuts steel city on the upper reaches of the industrial chain of the negative impact the whole industry chain will certainly result in greater impact. Amount to early June, hot weather encroaching storm over the country, and more affected by the construction site, plus the real estate price trends thicker, the market demand for Xianluo's very optimistic, lack of market confidence.
Market demand is still no significant improvement. Data show that in April electricity consumption growth rate dropped significantly, dropped 2.2 percentage points year on year, the chain dropped 2.6 percentage points. Among them, the manufacturing, mining and other industries dominated the second year growth rate of electricity consumption fell from 15.13 percent in February of this year to 4 percent in April of this year hit the lowest growth rate since March 2013. In addition, in January ~ April, the industrial enterprises above designated size gross profit increased by 10%, compared with the previous three months fell 0.1%; main activity profit rose 9.1 percent, compared with the previous three months fell 0.3 percent. These show the basic needs of the steel market remains unstable and demand situation has not improved significantly.
A substantial increase in steel stocks. Recently, though steel inventories appeared persistent decline, but substantial growth in steel prices in stock. China Iron and Steel Association data show that in mid-May statistical inventory of key steel enterprises 14,997,800 tons, growth of 4.89%. Social inventories fell once been seen as a result of improvement in demand, but it is worth noting that the stock steel trading business and market environment due to poor funding and reduced a lot, steel trading business inventories accounted for a large part of the social stock, while Supplying current efforts to breed a lot of steel to increase, resulting in a reduction in market liquidity. These conditions are reflected in the lack of effective demand of steel.
Iron ore prices continue to decline. Recently, in iron ore prices fell below 100 U.S. dollars / ton after market weakness filling, June 2nd grade of 62 percent iron ore index fell to 91.75 U.S. dollars / ton. In fact, iron ore prices since the beginning of this year has been quite obvious for two consecutive wave down market. The first wave is beginning early this year - in March, iron ore prices fell to $ 105 / ton; second wave fell again in mid-April and late May fell to 97.2 U.S. dollars / ton. May 30, iron ore price continues to external disk platform fell to $ 90.5 / ton to 90.8 U.S. dollars / ton. Insiders pointed out that iron ore prices fall, bringing the increase in iron ore investment, financing risk and default risk long association mining, iron ore banks will tighten credit approval authority, even steel inventory cycle will changed. And, now, with Rio Tinto Simandou mine in Africa will be put into operation in 2018, as well as other mine production, the supply of iron ore continued to show an increasing trend.