The hottest market demand is weak, and the steel p

The market demand is weak, and the steel price at the end of the year is difficult to be optimistic.

the steel market trend in December was first strong and then weak. As of the 20th, taking hot rolling as an example, the price rose by about yuan/ton compared with the same period last month. At the beginning of the month, the futures performance was strong, while the spot resources rose with the support of low inventory and high cost, and the highest regional price was close to 4800 yuan/ton. However, as the end of the month approached, the futures trend returned to weakness, coupled with the increased capital pressure on the spot market, the market price performance was weak. Then how will the steel price trend in the later period? Let's analyze it in combination with some data just released recently:

first, let's look at the supply side data: in November, the crude steel output increased by 2.2% year-on-year to 66.15 million tons, which was 62% less than that in October, and the fish could swim through 10000 tons under the screen, with the growth rate decreasing by 3.9 percentage points month on month; In November, the average daily output was 2.255 million tons/day, down 5.54% from October. The high profit per ton of steel stimulated the steel plant to expand production, and the monthly output in November was at a high level in the same period in history, with a piston sticking into the bottle without touching the bottleneck; However, in November, some cities entered the production limit period of heating season, and the average daily output decreased significantly. In December, the policy of limiting production in the heating season has been implemented, and some cities in the north will limit production in the whole month of December. With the influence of seasonal factors, it is expected that the average daily output of crude steel will still decline month on month, which is a very risky situation

secondly, look at the demand side data. In October 2017, the completed investment in real estate development increased by 7.8% year-on-year, and the growth rate decreased by 0.3% compared with the month. The newly started area and sales area of houses decreased by 5% and 7.9% respectively in April. The real estate sales and investment policies continued to tighten or showed the weakening trend of investment. In October, the completed amount of infrastructure investment increased by 15.85% year-on-year, and the growth rate decreased by 0.03% compared with the month. In October, the infrastructure investment in a single month increased by 11.6% year-on-year, and the growth rate decreased by 4.1% month on month. Considering that the fiscal expenditure in the month has accounted for 84% of the annual budget, far exceeding the historical same period, in general, the downward pressure on the growth of real estate and infrastructure investment remains unabated. In December, as the off-season deepens, some construction sites will be affected and the temperature will drop, and the environmental protection requirements in the heating season will further promote the increase of construction site downtime. It is expected that the demand will further weaken month on month. The "2+26" urban iron and steel industry in Beijing Tianjin Hebei and its surrounding areas has been fully started in the heating season, and the market supply contraction is expected to continue

next, let's look at the import and export data: according to statistics, China exported 5.35 million tons of steel in November 2017, with a monthly export volume increased by 370000 tons compared with the previous month and decreased by 2.77 million tons compared with the same period in 2016. In December, the heating production is limited, the domestic supply and demand are in a tight balance, the steel price remains high, and the export power of domestic steel enterprises is weakened. It is expected that the steel export volume in December may remain low. Since January 1st, 2018, the export tariff of steel products will be abolished, but hot rolling is generally exported as alloy steel, and the export tax rebate policy of 5% - 13% will be implemented. The introduction of new export tariff regulations will not affect the export steel that originally enjoyed the tax rebate preference, but will reduce the cost of export steel that originally could not enjoy the tax rebate preference. Therefore, the new deal has little impact on the export of hot rolled coil

in general, the off-season in December is deepening, and some construction sites will be affected. The temperature drop will gradually shut down. The environmental protection requirements in the heating season also further promote the increase of construction site shutdown. It is difficult to be optimistic about the market demand. In addition, at the end of the year, the financial pressure is prominent, and the merchants' willingness to ship is relatively dominant. However, considering wiping and cleaning the surface of the instrument, the current steel plant is affected by production restrictions, the actual output is low, and the resources in the hands of merchants are more scarce, The support at the bottom of the market price is still strong, and it is expected that the steel price will be mainly weakly adjusted in the short term, but there is limited room for decline, which is expected to be within 100 yuan