Looking forward to your favourable inquiry!


Steel mill profits fell in 2019, steel was overbalanced between supply and demand

Date:2018-12-26    View:495      Tag:Steel mill profits fell in 2019, steel was overbalanced between supply and demand

  At the "Meet the 2019·Yangcheng Hui Commodity Investment Forum" held in Guangzhou on December 23, the guests expressed that the Chinese economy still cannot get rid of the two pillars of real estate and infrastructure, and the trend of rebar and real estate is the same. The price of rebar investment in infrastructure investment is often the role of the bottom and the icing on the cake. In 2019, the supply of steel is in short supply, and the supply and demand are overbalanced. The stage may be oversupply.

  Wang Yingwu, director of black research at Huatai Futures Research Institute, said that the core logic of the rapid rise in commodity prices in this round is consumption, and the main line of logic is environmental governance and risk prevention. On the one hand, the results of the supply-side reform have been the biggest manifestation of steel production profits, limited production, environmental protection and its own capacity bottleneck, resulting in continued restrictions on pig iron production, and also formed a continuous low crude steel production. The rapid increase in scrap production and sales has effectively compensated for the shortage of blast furnace pig iron production. On the other hand, consumption has risen to form a black market that continues to rise this round.

  He believes that in terms of consumption, real estate is still the main industry driven by steel consumption. The base value and the bottoming effect of the infrastructure need to appear in the second half of 2019, but the price of infrastructure and industrial products is basically completely negatively correlated. The steel consumption in the manufacturing industry is sluggish, and cars, machinery and shipbuilding are showing signs of fatigue. On the whole, it is difficult for steel consumption to show a significant cliff-like decline. The probability is steadily declining, the growth rate is further reduced, or the performance is zero. However, there are still staged consumption explosions in the season and rhythm.

  “The supply side is nearing the end but not finished, mainly focusing on the reduction of capacity, including the relocation of urban steel mills and industrial access. Therefore, the growth of production capacity will not be seen in the next two years, and the supply side is still slightly optimistic, no There will be continued losses in the industry. Environmental management has basically failed, and the production stoppage will be significantly weakened, so it will bring about a significant increase in production, which is the biggest supply-side impact in the next two years," he said.

  Wang Yingwu finally said that on the whole, if the strong policy interference is deducted, the steel will be transformed from a serious supply shortage to a balance between supply and demand and even further deterioration. During the period, there will still be a phased supply and demand mismatch, especially if there is no supply increase in the three major steel materials, the cost will form an effective support. Therefore, the price will not go down all the way, and it is impossible to repeat the old road of 2013-2015.

COPYRIGHT©2011~2018 DMH UNITED STEEL INDUSTRY CO.,LTD All Rights Reserved. www.united-steel.com    Links