CCTV: The Best Year of Performance Steel prices keep dropping! Who's pushing? _price


Original title: CCTV: The best year of performance Steel prices continue to fall! Who's pushing?

Since November, the entire steel market has changed dramatically, and this week's decline has dramatically increased. Data show that rebar prices in major domestic markets have been reduced by 300-750 yuan / t since November. Similarly, the profit of the Chinese steel industry in the first three quarters of this year increased by more than 70% over the previous year, reversing the situation of scarce profits and even losses for many years, achieving the best performance in history.

In the best year of performance, why have steel prices continued to fall? What are the challenges for steel prices to stabilize? On the evening of November 24, CCTV Finance Review invitedin

Li Xinchuang, director of the Metallurgical Industry Planning and Research Institute, and Guo Liyan, a researcher at the China Academy of MacroeconomicsGuest studio, deep analysis.

Steel prices continue to fall Who is pushing hands?

Li Xinchuang: market expectations are not optimistic is the main reason for the decline in steel prices

Li Xinchuang, director of the Metallurgical Industry Planning and Research Institute:First, downward pressure on economic growth has increased, especially steel-related investments such as declining real estate investment and similar situations in the automotive industry. Secondly, steel prices are at a high level and companies are trying to expand the production in search of better profits. Some projects to replace production capacity and transformation projects were put into production and supply expanded, the market exceeded supply and, thirdly, commercial friction has direct or indirect effects on market expectations. These are the three most important factors that drove prices down at this stage.

Guo Liyan: The pressure is transmitted from the downstream to the middle and upper.

Researcher at the Institute of Macroeconomic Research of China, Guo Liyan:From data from the e-commerce platform of the steel trade, the decline in transaction data in November was more evident. The inventory of major steel companies rose on the downside, while the social stock fell faster, indicating that the pressure is being transmitted downstream. Social stocks, that is, traders are reluctant to buy goods, and in that sense, upstream mills have an increase in inventories, which has led to price cuts.

Li Xinchuang: Steel prices have room to fall, but there is also demand for support

Li Xinchuang, director of the Metallurgical Industry Planning and Research Institute:First, there is room for steel prices to fall, but I do not think it will fall significantly. The entire Chinese economy will continue to develop steadily, so demand for steel will remain high, second, if the price of steel is too low in previous years, the high price this year will be needed to some extent, but steel industry is capital-intensive and technology intensive, and both production and R & D require a lot of investment, so the healthy development of the industry needs a reasonable profit support, which is also an internal support.

Steel prices should stabilize, where is the challenge?

Li Xinchuang: Controlling production, stabilizing the market

Li Xinchuang, director of the Metallurgical Industry Planning and Research Institute:It is important to control production and not blindly expand production.2016Year for2018National capacity1.5Billions of tons at the same time knocked out1.4The production capacity of 100 million tonnes of rolled steel, along with technological progress in various aspects of industrial productivity in recent years, has created conditions to improve the market price and, at the same time, significantly increased the impetus to increase production and increase production. We have to deal with this seriously in regulation.

Guo Liyan: Doing a good job, adding high quality greening, is the cornerstone of price stabilization.

Researcher at the Institute of Macroeconomic Research of China, Guo Liyan:In fact, I disagree with the market question about the steel market being a bull market and a bull market. Supply-side structural reform is actually a combination of addition and subtraction: removing the low-cost invalid, this is the subtraction dividend, but it also brings about the recovery of the prices of this round, which makes many steel companies operate better ;

Before we investigated in Jiangsu and Zhejiang, some steelmakers began to upgrade their products during the last round of falling prices. When I go back to visit11The price this month fell, they were not affected, because the fall is not their main steel products. Therefore, I believe that such cutting-edge and green development is an important milestone for the stabilization of future prices.

Li Xinchuang: high-quality development is the key output for steel companies

Li Xinchuang, director of the Metallurgical Industry Planning and Research Institute:The whole country is turning to a high-quality development, and the steel industry must also adapt to this general trend: first, we must do a good job in green and low-carbon development. Intelligent manufacturing makes steel efficiency and efficiency more competitive, while raising standards and brand building, so that China's steel actually improves its operational level.

Guo Liyan: This round of falling prices is the inevitable process of shifting to the market to dynamically adjust supply and demand.

Researcher at the Institute of Macroeconomic Research of China, Guo Liyan:There is no need to worry if the price will return to the loss of the entire industry a few years ago. Today, the industrial structure of the steel industry and the distribution of the entire profit situation are not the same as before, which is the phased result of structural supply-side reform. As a competitive industry, the future of the steel industry chain, from production to sales, to profits and losses, should be a dynamic adjustment process.

The game of profit in the black industry chain Who's eating in the mouth of the tiger?

Now everyone in the black industry chain is worried about the profit from steel production. Looking back last year, I saw the price of rebar as an example: the price did not look very decent, except at the beginning of the year. It just fell out recently. The price of hot coil is worse than rebar, why? As some new industries are being launched now, the future capacity of hot coils will exceed 330 million tons. The price of raw materials is high in profit, the steel industry is willing to produce and is willing to pay more for the price of raw materials. Coke prices have steadily risen, coking coal prices have steadily risen and scrap prices have recently receded. This is a very important phenomenon. This shows that the profit from the short upstream process was compressed, and the short-term steelmaker began to take the raw materials. This logic also applies to coke and iron ore for some time.

Terminal demand, investment growth rate of 5.7%, real estate growth rate continued to decline, 9.7%, real estate investment has some investment in construction and installation, construction investment in September is -3.45%, the old -3.24%, installation engineering -7.97%, The former is -7.28%. Real estate investment in steel demand can enter the trawl phase. From now on, demand for short-term steel is about to enter the off-season period. Currently, demand in the middle is slightly weak. Steel traders are scared to get the goods. What should I do if I do not can sell the goods in the next ten or twenty days? In the long run, the growth rate of investment in long-term fixed assets has declined.

The investment is divided into three parts, real estate, manufacturing and infrastructure. This year, the real estate industry has undergone more major changes. The growth rate of the new construction area and real estate construction area is good, and Jian'an has declined. Once everyone gets the ground, they expect to get into the sales process as quickly as possible, so there must be a rush to enter the sales department to control the cost and control the progress of the building. Real estate has seen a clear change in attitude after June and July this year, but will not start until May, but several construction sites will begin at the same time in July. What is the reason? The market may change, and land must be realized, otherwise the real estate venture will lose money in the future. The growth rate of the property purchase area changed and the October growth rate was negative by 10%. With regard to the current situation, the construction of the real estate site is relatively normal, and some of them are in the process of acceleration. Demand seemed good, until last week there was a drop in demand.

Last year, environmental protection has restrictions on construction, but this year's restrictions are not. This year, rigid demand in May and July is good, but it is expected that winter will not be an environmental shutdown. There is no environmental shutdown this winter.It is in the construction season from north to south. . The real estate industry has an expected turning point, although the cumulative sources of funding are now at a relatively stable growth rate, and have found that their expectations for the future have changed through exchanges with real estate companies. Such expectations will change the speed of land acquisition and will also change the speed of investment, which will reduce the demand for steel, especially rebar.

Manufacturing investment is on the rise, and the industry will naturally invest when it makes a profit because it wants to expand production capacity, or expect to undergo technological change, or invest in environmental protection requirements. What should I do when profit goes down? Whether the growth rate of investment is stable or not is likely to be unstable, and the rate of growth of profits of industrial firms began to decline.

The growth rate of infrastructure investment is stable and the rate of investment growth is very low. In the context of huge local debt, how enthusiastic is the local government's investment infrastructure? Now it's a question mark. As local governments are more concerned about liability, if new debts are generated, responsibility can not be guaranteed. From a long-term perspective, the rate of growth of infrastructure investment will not increase. China is in a period of transition between new and old growth models, and the transition period is precisely that the new growth model has not taken shape and the old growth model is declining. Even so, we must have confidence in China's future economy.

The high season for steel consumption is in the making, and the end is likely to start last weekend. From the situation that traders know about the local steel mills, there is a sign that, for example, traders have requested goods from steelmakers, and steelmakers usually have only two specifications or only one specification and withdraw them. Appeared last week and I wanted everything, although there was no obvious change in price and quantity, it is speculated that the stock of the steel mill was about to happen.

Apparent consumption is increasing this year, apparent consumption in September was 91.55 million and in September 92 million. From the high frequency data, the national transaction of building materials began to drop significantly last week.

Traders are more cautious because they are about to enter the off-season in December. Steel social stocks fell, middlemen did not get goods, and inventories of major steel companies rose. Is there a decline in steel stocks, the decline is a passive decline or an active decline? If the active decline means that steelmakers start selling, that sale will not be as favorable as the price, but it will become a pressure. From the Lange Steel Trade Purchasing Managers Index, everyone's interest weakened.

Coming into December immediately, when winter storage will begin this year, the attitude of steel and steel trading companies is completely opposite. This spring, steel trading companies have very little money to make goods.At some time ago, they traded with steel trading companies.Everyone was seriously injured.If steelmakers do not give more suitable price compensation this winter, the interest of steel trading enterprises in winter storage is not high. Combined with the problem next year, after getting the steel and sell next year, what happens to demand downstream next year, no one dares to speak now. Now that the macro is down, in such a difficult situation, the new meeting of the Politburo still does not say that the real estate market is being initiated. In the future, steel products, especially building materials, may be partially suppressed. Total demand for steel products may be slightly weaker next year.

Data on the production and sales of excavators in October were relatively good, with signs of falling, with a 10% growth rate, a 10% decline. This shows that there are some problems with downstream consumption, including other signs.

In steel production, pig iron output in October was 67.74 million tons, year-on-year growth was 12.87%, crude steel increased 9%, rebar increased only 0.08% % and wire production was restricted. The proportion of steel for pig iron production, the production of short-term steel mills is being gradually freed. The production of short process steel is subject to profit restrictions. If this part is destroyed, the market will be reduced, which needs to continue to track.

This year's production limit, from the spring of this year to the previous days are shouting limited production, but production has not decreased much after the production limit, our production is passivated by environmental protection. In the past two years, steel companies were also good, coke companies are also good, investment in environmental protection is relatively large, a steel-smelter affected by environmental protection costs can increase 200-300 yuan per ton of steel. Already have some equipment to meet the requirements. In the second aspect, the profit of the steel industry was maintained at a high level.In case of environmental maintenance, other technical measures can be taken to increase production.It is the phenomenon of the addition of scrap of short process.The end result is that steel production is not Falling and rising.

In the index of purchasing managers of the steel industry, the interest of all is very high, due to the high profits. When will production be reduced? Only when the profits of the steel companies are reduced will the decline in production occur. Recently, due to decreased profits, environmental protection, blast furnace operation rate, daily average of crude steel, this impact can not change market expectations, especially at the time, intermediate demand has become very small. By the end of the year, average demand has turned into an intermediate supply, which is not very beneficial for the supply-demand relationship.

This is the main production of rebar and wire production of the company, because the profit margin is relatively high. The export volume of steel is relatively low, because domestic steel prices are very good. Looking at the inventory of steel companies, data published by the Iron and Steel Association of China show that there are accumulated libraries. The next question is, is it a way of cutting production and securing prices or making a settlement? From the current point of view, production does not seem to fall much, so the process of accumulation will continue. If the stock is high to some extent, the price may fluctuate down because steel begins to sell.

Imports of iron ore remained at a high level, but imports fell in October. Shipments can be limited by commercial profits. If the price of the mine goes up and the spread is withdrawn, many people will be willing to import it. The market reflects commercial profits and, from the point of view of imports and production, individuals believe there is no shortage of supply. Where is the whole focus? It's a game between mines and steelmakers. In September, the price of minerals rose, steel mills were now being replenished, and the number of days available on November 9 increased to 29 days, which is at a relatively high level in recent years. Next, we need to pay attention if the steel mill's refueling pace is at a standstill. If you stop, it will soon be reflected in reducing remittances. Looking at the current situation, steel ore stocks have emerged. Under normal circumstances, the power of refueling may decrease. From the current point of view, it is still in a relatively high position.

Domestic mine production is relatively weak, with little impact on mine prices. Mainly imported mines, from the scrap steel, when the short process output is compressed to a certain extent, the long process compression begins, when the price of iron ore is compressed.

The coke supply is not floating and the production of ten is in a relatively high position. It is necessary to pay attention to the fact that the positive side of coke production for production may be limited, and the capacity utilization rate will decrease year by year. If production share of steelmakers start to rise in the future, as in the following spring, it can be seen that the supply of coke has been affected. Recently, steel mills are replenishing coke stocks, and some companies have made up for them, some of which have not been fully replenished. Now the price negotiation is in a very delicate process, some coke mills have dropped by 100 and some steel mills have fallen by 50%, and are now in a relatively balanced state. As coke refueling is gradually completed, as profit from steel production is compressed, it may be at some point in the future, and the spot price of coke may fall in the middle of next month. Where is the nucleus? Profit from steel production is the core.

When steel production profits begin to decline, steel mill operations increase production and reduce costs so profits can be secured, but as steel prices continue to decline, we will see pressure to move upstream. When steel profits continue to fall and fall to some extent, steel companies will see output decline. The main focus of the main market in the future is the profitability of steel production.

From the current point of view, steel demand is about to enter the inter-harvest period, the average demand reflects the intermediate supply, the trader reflects the intermediate supply when the trader goes to the winter store this year, only when the price It's fair. Every year, there is no winter storage, and there is winter storage every year. The key is when the price is right. When we talk to traders from the north, sometimes 3500, it is suitable, the steelworks is adequate and not suitable, I will play the game here in the future.

Steel production is not as good as expected, although China Steel Association has released some data, the decline is very limited. Steel mills restock the pace. At the beginning of the decline in profits, steelmakers are more willing to increase production. Their demand for raw materials is quite good, but when profits continue to fall to some extent, we will see profits going upstream . Coke, short-term supply From the current point of view, coke companies rarely have stocks because steelmakers have more demand for goods. The second coking companies have never had too much stock, which is determined by their ability to withstand risks. Most coking companies are unable to stock. Now there is an inflection point, the turning point is that steel refueling can come to an end.

We have to pay attention to the profit from steel production, and now the profit from steel production is falling. We see that short-term steelmakers start to profit from upstream scrap, and then see when steel prices fall rapidly . Judging from the current situation, companies producing long-flow rebar have obvious stock pressures. When price reduction is achieved, production efficiency will be reduced. The decline in production profits will lead to upward transmission. There are different opinions, probably in the recent past, because the off-season has come, profits in the industrial chain are compressing. When we talked to steel companies recently, everyone is pessimistic, as last year, this year, macro-pessimism about next year will be passed on to the industry. The drop in steel prices this year may be higher than last year. Traders' winter storage time will only appear when the spot price falls more sharply. (Zhonghui Futures Li Wei)Go back to Sohu and see more

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