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Forecast: The rebound after the steel price bottoms in the first half of 2019 will not be absent

Date: 2019-03-11
Views: 10

Article source: China Steel Price Network

Chief Engineer, Mysteel Steel, Wang Jianhua


Wang Jianhua first summarized the steel market in 2018. The main performances were: steady price rise, steady profit growth, steady increase in supply and demand, steady increase in efficiency, steady and declining leverage, and steady improvement in environmental protection.


Then, he pointed out that the overall steel market in 2019 will no longer come, but he is worried that the rebound after the steel price in the first half of 2019 will not be absent.


In terms of inventory, he said that from the data of the third week after the holiday, the inventory growth of steel mills was less than expected, the growth of social stocks exceeded expectations, the total stocks increased slightly more than expected, and the total stocks after the holidays were still 1.265 million tons lower. From the data of the 4th week after the festival, compared with the pre-holiday, the overall inventory turned better, and the social inventory pressure improved faster than the steel mill inventory pressure improved. Overall, the pressure is smaller than last year.


On the supply side, he said that short-term supply fluctuated slightly, and continued to increase year-on-year, but the chain fell back. The space for continued increase was limited, mainly because scrap prices were at a high level and the capacity utilization rate of electric arc furnaces was suppressed.


On the demand side, he said that short-term demand is better than the same period last year, and later, it is necessary to consider changes in real estate demand and changes in foreign market demand. The volume data of building materials monitored from Mysteel showed that the construction materials sold significantly increased at the end of February, supporting the steel price.

In terms of raw materials, he said that coke prices are temporarily in shock. Iron ore prices are affected by the Brazilian mine dam event and prices cannot be underestimated.


In terms of the market environment affecting steel prices, he said that first, there will be no major changes in the year-on-year inventory growth; second, the pressure on traders to stockpile and the amount of agreements is reduced; third, the liquidity has improved; and the fourth is the 'black swan'. Maybe not; fifth, there should be no short-selling phenomenon of malicious manipulation of the market.


Finally, Wang Jianhua pointed out that in 2019, the comprehensive steel price fell back, and the average price fell by 5%-10%.

 

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