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However, in the face of the old-fashioned issue of iron ore negotiations, the industry has expressed concerns. "In the long run, the control of iron ore prices is difficult to change, and in terms of access to upstream resources, Chinese companies have not yet made a fundamental breakthrough," said a steel company.
Steel producers push up prices after the production limit
On September 14, Baosteel Co., Ltd. (600019.sh) announced the product price policy for October, and the main products rose slightly by RMB 100-380/ton. On the second day, the domestic large-scale steel enterprise WISCO followed closely, and also released the export policy of steel products in October. The main products rose by 100-400 yuan.
It is reported that after the introduction of the production limit in July, Baosteel's steel product prices rose by 5.6%, while its crude steel output fell to its lowest level since February.
According to the latest data released by the National Bureau of Statistics, domestic crude steel output in August was 51.64 million tons, down 1.1% year-on-year. For the first time in the year, there was a negative growth; Nissan crude steel was 1,665,800 tons, a decrease of 0.32 million tons from the previous month.
“After the actual upper limit, steel prices have been rising, but the driving force before and now is mainly the production reduction caused by energy saving and emission reduction, but if we can see some changes in the analysis, this price increase factor There is also an optimistic judgment on the relationship between supply and demand in the next quarter," said Li Han, an analyst at Steel.
Qilu Securities analyst Zhou Tao also told reporters that energy-saving emission reduction and production limits are still an important driving force to push up steel prices, especially in recent Hebei and other places to increase the implementation of energy-saving emission reduction, the implementation of power cuts for some steel mills Discontinued. The market expects that steel supply will decline in the future, and traders will start to push up prices.
Another push for price increases
However, the reason for steel companies to raise prices is not just a policy factor limiting electricity production. It is worth noting that after the price increase of Baosteel and Wuhan Iron and Steel, the prices of some steel products such as wire rod and rebar have fallen for several days, and the pulling effect of energy conservation policy has weakened. The next stage of the domestic market is hard on steel products. Demand has gradually begun to become the main driving force for steel companies to increase prices next.
Hou Zhizhen, director of the Lange Steel Network Research Center, told reporters that September and October each year are the traditional sales season for steel. At the same time, there are many flood disaster areas in China this year. The demand for reconstruction work in the second half of the year is greater than in previous years, and all must be tightened before the frost. All kinds of construction projects will be accelerated, which is after September. The increase in demand for steel is brought about. In comparison, the construction of southern China is longer and may be more demanding.
In Hou Zhizhen's view, the government urged developers to speed up the construction and implement policy housing, especially post-disaster reconstruction and affordable housing, which has a great pulling effect on steel demand.
It is precisely because of the optimism about the demand for steel in the next phase that the steel industry's order indicators have rebounded since August.
According to data released by the China Federation of Logistics and Purchasing (CFLP), the new PMI orders and new export orders in the steel industry rebounded rapidly in August, and the new orders of steel companies rebounded sharply, up 18.8 percentage points from July. It reached 55.5%.
Iron ore price cuts in the fourth quarter
At the same time, large-scale energy-saving emission reduction seems to have brought good benefits to iron ore negotiations. It is understood that Rio Tinto has agreed to reduce the price of iron ore by 13% from the fourth quarter. For the other two major mines that will determine the price next week, the price cut is a foregone conclusion.
Hou Zhixuan said: "The price has been almost fixed before the price. Now there are more market-oriented factors in the quarterly pricing. The price in the fourth quarter will definitely not reach the price in the first half of the year."
According to public data, China's iron ore imports have continued to decline since the second quarter. In May, it fell by nearly 3%, and by June, July and August, the decline in iron ore imports was above 10%.
According to statistics from Lange Steel, the iron ore imports in the remaining months of this year will be 50% lower than the highest monthly imports in the first half of the year due to energy conservation and emission reduction.
Under the circumstance, the remarks of "three major mine panic" and "China counterattack" appeared in major media. However, for the psychological advantage of iron ore price negotiation brought about by large-scale energy conservation and emission reduction, Zheshang Securities analyst Dai Pengju told reporters that the current domestic measures are actually a short-term behavior, mandatory production cuts, Rather than adjusting the industrial structure and integrating resources to optimize production behavior, the behavior is the same as that of steel mills. In particular, China's steel production originally had serious overcapacity, and this energy saving and emission reduction cannot fundamentally solve this problem.
A staff member of a steel mill also told reporters on the phone that in the long run, the control of iron ore prices is difficult for us to change. To change this passive situation, one must adjust the domestic steel industry. Industrial structure, strengthen integration, on the other hand, go out to get upstream resources. However, in the acquisition of upstream resources, Chinese enterprises have not yet made a fundamental breakthrough.
On the one hand, the price is limited, and on the other hand, the price of steel is continuously pushed up. It seems that Chinese steel companies have already tasted the sweetness of energy saving and emission reduction.